Licensing Agreements

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.