Part 2: The Patent, but not the Trade Mark

Last week we looked at how someone else killed a 20-year business relationship in which I was involved. This week, we are going to look at another 20-year deal that is now history, but this time the person to blame is someone I see in my mirror every day.

In the early 1990’s, my father concluded an agreement with a competitor, in which they acquired all of our company’s operating assets. Our family business went from 250 people down to 4, and two of them went by the name Steve Legler.

We were left with real estate and intellectual property (IP). The IP was essentially a few patents and trademarks on some specialized products that we had been producing for some time before the sale of the operations. A large part of the attraction of the agreement for both sides was a licensing agreement in which the acquiring company also became our exclusive licensee.

When two companies enter into a licensing arrangement, they always start off hoping for the best, but one never knows how things will turn out over the long term. Companies get sold, executives move around, and priorities change, so you never really know if that deal is going to work out the way you hoped.

But if deals that don’t go as planned are the rule, then this deal was truly the exception. Our licensee remitted every royalty payment in full and on schedule. We had access to the company’s top people, and they upheld every aspect of the agreement to the letter.

So what went wrong? Well for one thing, they never really grew the market for the product, and we always felt like there was some unexploited potential that they could have tapped, to grow the market in other territories.

They did bring in a distributor who worked the marketing end of things and grew the market somewhat. When their distributor was acquired by another manufacturer, who had more global reach, it seemed like they would be a better fit for my dream of greater market growth for the product line.

So when our original deal came to a crossroads with the expiry of a patent, I made the hasty decision to make a deal with the company that I had hoped would finally see this product reach its true potential, and I offered them a Trade Mark licence.

Here we are only two years later, and I am left with nothing for my troubles. Things did not work out as planned, as the new licensee did not get off to a good start, trying to do things “their way”, with little or no input from me. Eventually some other internal issues had our product line fall way down the list of priorities for their firm, and I am now on the outside looking in.

I had a bird in the hand for over 20 years. I thought that there were more birds in the bush, and I wanted them.

Now I feel like the guy who got bored with his wife and left her for a prettier, sexier version, just because he thought that that would make him happier. Now the new one dumped me, and I would love to go back to my wife.

I am pretty sure that if I did this to my wife, she would not take me back. I only hope that my former business relationship has a higher likelihood of being salvaged.

I know that it won’t be easy, because I know that if the shoe was on the other foot, I would have to think long and hard about a reconciliation.

But I have to try, and writing this blog has helped me get started.

Moral: Sometimes “you don’t know what you got ‘til it’s gone”.

Steve Legler “gets” business families.
He understands the issues that families face, as well as how each family member sees things from their own viewpoint.
He specializes in helping business families navigate the difficult areas where the family and the business overlap, by listening to each person’s concerns and ideas.  He then helps the family work together to bridge gaps by building common goals, based on their shared values and vision.
His background in family business, his experience running his own family office, along with his education and training in coaching, facilitation, and mediation, make him uniquely suited to the role of advising business families and families of wealth.
He is the author of Shift your Family Business (2014), he received his MBA from the Richard  Ivey School of Business (UWO, 1991), is a CFA Charterholder (CFA Institute, 2002), a Family Enterprise Advisor (IFEA 2014), and has received the ACFBA and CFWA accreditations (Family Firm Institute 2014-2015).
He prides himself on his ability to help families create the harmony they need to support the legacy they want. To learn how, start by signing up for his monthly newsletter and weekly blogs here.