Should a small college or university be licensing their trademarks?
Trademark licensing is big business for big universities. The International Licensing Industry Merchandisers Association estimates collegiate licensing programs raked in $209 million in 2015.
Large universities with internationally recognized brands and large alumni bases—such as Notre Dame, the University of Texas at Austin and Florida State University—top the list of highest licensing revenue earners.
These universities have entire offices dedicated to managing licensee relationships, reviewing merchandise samples and artwork, negotiating contracts, and collecting royalties.
Is it worth the time to operate a trademark licensing program, even if the revenue potential is far less than that of a school like University of Michigan? At Meredith College, with 2,000 students and 22,000 alumni, we decided the answer is “yes.”
First, we saw an opportunity to gain control over how our college name was used in the marketplace. Many Meredith T-shirts, mugs, notebooks and the like were being produced annually. Without a licensing program, we didn’t have a strong mechanism in place to ensure the college’s name, logo and other marks were being used appropriately.
Second, we wanted to diversify our revenue sources. Finally, we were beginning a new branding campaign, and wanted to increase our visibility.
Before you begin
We started our trademark licensing program a little over five years ago. We’ve learned several lessons along the way to help other institutions decide whether to start a program:
1. Be prepared for upfront costs. These can include legal fees for reviewing trademark agreements and for guidance on federally registering certain phrases associated with your institution. The upfront costs we incurred were less than $5,000 and we earned them back within the first full year of the program.
2. Develop a policy to guide your efforts. Determine what kinds of items your institution does and does not want associated with its name.
Will you allow your institutional marks to be used on alcohol-related products? Is your institution willing to assume the risk associated with being licensed on consumables? Are there any institutional symbols, such as the official seal, that will be licensed only on certain items?
3. Consider partnering with a licensing group. There are firms, such as Learfield Licensing Partners or the Collegiate Licensing Company, that specialize in managing college and university licensing programs in exchange for a share of the royalty revenue.
Partnering with such companies gives your college or university access to a broader network of potential licensees and to a team committed to enforcing compliance on your behalf.
4. Build a network of experienced licensing pros. The higher education licensing community, particularly the International Collegiate Licensing Association, is a great resource.
Members of the association helped answer the unforeseen questions we encountered, and the head of the licensing program for a major nearby university has also proved to be an invaluable resource.
5. Explain the benefits. There will be a lot of uncertainty about a licensing program. Helping your campus community understand how it will benefit from the college’s brand being used correctly, how the process works, why it doesn’t affect retail prices and how the money from the program will be used, will go a long way in easing these fears.
Returns on investment
Although it is unlikely that Meredith College will replace Notre Dame or the University of Texas at Austin as a top licensing revenue earner in the near future, the benefits to our institution for a trademark licensing program far exceed the costs.
Our licensing program, which is one of our fastest-growing sources of revenue, has netted more than $140,000 since it was created. Other institutions should consider launching—or expanding—their trademark licensing programs.
Kristi Eaves-McLennan is executive director of marketing for Meredith College in Raleigh, North Carolina.