Owners of intellectual property rights are free to allow others to exercise their rights. A permission to exercise a right is known as a ‘license’. 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?
- Negotiation and/or bargaining tool
- Protection of your invention
- Patenting too early might lead to problems later!
Why choose licensing?
- To make money!
- Licensing multiplies the resources to develop your invention
- Strategic partner see opportunities and threats you don’t
- You may make some low risk money and you may make it soon
Are there any negative points regarding licensing?
- You loose total control of the technology
- Your own involvement is reduced
- Finding the correct licensee/strategic partner is hard
- Protecting your interests is crucial!
Different types of licensing
- Exclusive Licensing
In terms of which only the licensee is entitled to use the rights licensed
- Sole License
Which is similar to an exclusive license except that the licensor also has the right to use the rights licensed
- Non-exclusive License
In terms of which the licensor retains the right to license other third parties to use simultaneously the rights licensed