Licensing Agreements

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.