Owners of intellectual property rights are free to allow others to exercise their rights. A permission to exercise a right is known as a licence. In this agreement the holder of the right allows a third party to use that right in return for some form of remuneration. This is usually in the form of royalties or a lump sum payment.
Why do I need a protected IP right to license?
- It is a useful negotiation and/or bargaining tool.
- It helps to protect your invention.
- Patenting too early might lead to problems later.
Why choose licensing?
- To generate revenue.
- Licensing multiplies the resources to develop your invention.
- Strategic partner sees opportunities and threats that you may not.
- You may make low-risk money in a relatively short space of time.
Are there any negative points regarding licensing?
- You lose total control of the technology.
- Your own involvement is reduced.
- Finding the correct licensee/strategic partner can be tricky.
- Protecting your interests is crucial.
Different types of licensing
- Exclusive licensing:
Only the licensee is entitled to use the rights licensed.
- Sole licence:
Similar to an exclusive license, except that the licensor also has the right to use the rights licensed.
- Non-exclusive licence
The licensor retains the right to license other third parties to use simultaneously the rights licensed.