PATENT LICENSING

Exploitation of monopoly rights granted under patent protection is common all over the world. It mainly takes place due to –

  • Imposition of unreasonable terms or restrictive condition on the use, sale or lease of the patented product.
  • Refusal to grant license to work locally.

The license is where a patent owner i.e. licensor gives another person, the third party i.e. licensee, the permit to use that invention legally for commercial purpose. However, the license gets the permission to use the patent right; the licensor continues to be the owner of that product. It is the process of converting the idea into reality.

TYPES OF PATENT LICENSING

  1. Exclusive License: In this case, the title of ownership gets transfer to the licensee only for granting sub-lease.
  2. Non-exclusive License: In this case, there is multiple licensee and all have the equal rights to maintain and control the patented products and market of the product.
  3. Sub-Licenses: Under this case, the licensee has the right to sub lease the rights to another third party. It is done to expand the product market.
  4. Cross-Licensing: there can be exchange of licenses between different organizations.
  5. Compulsory Licenses:  In this case, the government has the right to allow someone to use the patent right. It is mainly for the manufacturing or export of pharmaceutical products to any country facing a public health problem.
  6. Carrot License: it is simply a market tactics in which the present licensee does not have the capability of optimum utilization of patent invention; he does not have the right to take the license any further.
  7. Stick License: in this case the third party uses the patented invention without taking the license, hence resulting in patent infringement.  It is suggested to apply for the license to continue with the use of the patented product.

STEPS FOR PATENT LICENSING

STEP 1: indentifying the patented product and its commercial use along with its obligation i.e. a detail study of the patented product.

STEP 2: identifying the companies and having a detail study over the companies. Before licensing the patent it is better to know the objectives of the company, company history, terms and conditions of license agreement etc.

STEP3: valuation of patented product.

STEP 4: the cost charged for such license and whether the licensee can afford it or not.

STEP 5:  choosing the type of patent license

STEP 6: filing the application as per the type of patent license.

LICENSE CONTENTS

  1. Background- parties and its intention
  2. Definition
  3. License grants
  4. Dates
  5. License issue fees, its payment and types of transaction.
  6. Warranties
  7. Technical help
  8. Terms on termination
  9. Any type of infringement clause
  10. Arbitration and bankruptcy clauses
  11. Right to sub-license
  12. Transferability clauses
  13. Rights and obligation of parties e.t.c