Patent licensing is the right through which patent owner can grant permission to sell, use, make etc. his/ her patented invention to another individual/ company. This is done according to agreed terms and conditions, for a defined intent, in a defined area, and for an agreed time period. As patent holder, one can retain possession of the invention and get royalty fees on prospect sales of the invention/product. Patent holder can decide to grant an exclusive license to one company or several companies.
There are two licenses “carrot” licenses and “stick” licenses. A “carrot license” is one come into voluntarily, while a “stick license” is the outcome of a patent enforcement.
A stick patent licensing approach is enforced when the prospective licensee is already using the patented invention and, thereby, infringing your patent. The value proposition here is “take a license or else… I will take you in court.” In this approach, the patent owner threatens to sue the licensee for patent infringement if the licensee does not take a license.
Signicent can conduct searches to identify partial or complete infringers and our business development team can help you find right persons in the ‘infringing’ company to strike a deal.
When the prospective licensee is not infringing the patented invention and, thereby it does not require taking a license, this approach is appropriate. The value proposition here is “my patent technology is better and by licensing it you will sell more products.” Or it may be “my patent technology is economical and by licensing it you will make more benefit.” Assuring a licensee to take a license is thus stringently a marketing exercise where Signicent can help. Sometimes, rather than licensing, you may end up selling the patent(s) to the other company and thereby transferring entire set of rights for the remaining life of the patent.
Signicent can identify these companies who are willing to license or buy the patents.
Patent licenses are classified as exclusive or non-exclusive:
In an exclusive license, a patent owner transfers all documentation of ownership to the licensee only accommodating the title to the patent. The patent owner gives away all rights under the patent (including the right to sue for infringement and the right to license) to the licensee. In essence, the licensee replaces the patent owner and acquires the right to sub-license the patent and sue for patent infringement. And the licensee gets a promise from the patent owner that the patent will not be licensed to anyone else in a stipulated field of use.
By granting a non-exclusive license, the patent possessor assures not to litigate the licensee for patent infringement. It is sometimes misinterpreted that by acquiring a non-exclusive license the licensee acquires the freedom to operate in the space protected by the licensed patent, but this may or may not be the case. It depends on whether or not the licensee’s products infringe other patents.