A licence is a contract whereby the owner of the patent gives permission to a licensee to use that patent. Licensing your patent to another party can be a very effective way to exploit your patent, particularly if you do not have the resources or experience to develop and market your product or service.
A licensing arrangement is a common method of commercially exploiting all forms of intellectual property (IP), not just patents. Trademarks, registered designs, copyright material and any associated knowhow can all be licensed. A patent licence agreement gives the licensee the right to use (but not own) the IP. The owner of the patent will usually receive payments in the form of royalties. Royalties are typically paid over the tenure of the patent, such as the maximum 20 year term.
A patent licence agreement may extend to all aspects of commercialisation, from developing it in respect of the manufacturing processes, to mass manufacturing products and marketing, promoting and selling those products.
Should I obtain an exclusive or non-exclusive patent licence agreement?
- Licensees often require an exclusive patent licence agreement.
- Non-exclusive patent licence agreements allow licensors to license IP to competitors (decreasing the commercial value of the licence to the licensees).
Who should control the manufacturing in a patent licence agreement?
- For new inventors, it is often easiest for the licensee to handle manufacturing of the product.
Where can I license my patent?
- A patent can be licensed to different parties in different countries.
- Sales based royalty rates and manufacturing based royalty rates can be defined for each country or region.
What kinds of financial arrangements can be made for my patent licence agreement?
- The financial terms can be arranged as:
- an upfront licence fee;
- a once-only or per unit royalty; or
- a combination of 1 and 2.
- Other financial terms are possible.
Important Disclaimer: The information on this website is not legal or professional advice. The information may:
- not be correct;
- only relate to the law or practice in a given country; and/or
- be outdated.
For more information, please contact the Site Administrator: Baxter IP Patent Attorneys Sydney.