A patent license refers to an agreement between two people where the owner of an intellectual property authorizes the other party to commercially make, utilize, and sell the invention for a period specified in the contract. The patent owner is called ‘licensor,’ the receiving entity is termed ‘licensee’ in the agreement.

Patent licenses involve payment details. The licensor either receives a lump-sum payment or continuous compensation termed “royalty,” depending on the agreement between both parties. Apart from payment clauses, a license agreement usually has some other terms and conditions consented to by both parties. The agreement also consists of product definition, mode of payment, the purpose of licensing, and the details of the licensor and licensee.

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How do we license a patent?

Patent International’s team of expert patent attorneys helps individuals and businesses reliable license their patents for profits.

We start your licensing process once you are aligned with the second party in the agreement based on similar products. The (USPTO) (United States Patent and Trademark Office) publishes a notice to announce the availability of your patent for licensing in its official gazette. Our prosecutors negotiate and draft the clauses included in the licensing agreement keeping every detail under microscopic analysis. A patent can be approved in three ways as per the requirements:

1. Exclusive Licensing

In an Exclusive License, the licensor transfers the authorization only to one licensee, which he cannot extend further. Once the license is granted, even the licensor cannot exploit the IP rights or sell the products under the jurisdiction of exclusive license.

This type of licensing is less prone to infringement risks and provides the licensee with a monopoly over the market. As a result, the cost of the product can be higher, and as such, the revenue and the royalty payment for the licensor, however, if the patented product is in demand to the extent that the licensee is unable to manage the production and the high rates, the government issues ‘Compulsory Licensing” without requiring permission from any party. In compulsory licensing, the government utilizes the rights against payment determined by law or arbitration.

2. Non-exclusive Licensing

A non-exclusive license does not authorize one licensee exclusively. Multiple licensees can produce the patented item without exclusive rights. In this agreement, the licensor also has the liberty to exploit the subject intellectual property.

3. Co-exclusive Licensing

A co-exclusive license exists between the lines of exclusive and non-exclusive agreements. In a co-exclusive license, the licensor grants the authority to multiple but limited licensees.

The above are the main three types of patent license, but there are others too, including a sub-license where the right to a third party is stipulated in the preliminary license agreement.


Get in touch with Patent International today for a free consultation on patent licensing.
What's Important?

The difference between a license and transfer/assignment

Patent licensing is an agreement where the patent owner authorizes the “licensee” to use the patented technology. However, the ownership remains with the licensor.

On the other hand, in a transfer agreement, the patent owner permanently transfers all the rights, including the ownership, to the other entity.

The guideline

Our guidelines to find potential licensees

At Patent International, we support our clients in every way with their patent licensing. We provide valuable guidelines to our clients to help them select the proper licensee for their IP. Know your patent before finalizing a licensee so you can generate substantial revenue from it. It is integral to evaluating the marketability of your patent. Ask these questions to yourself to have a clearer picture of your patent and the potential licensor for it.

  • How is your patent unique and different from others in the market?
  • Does your patent add an irreplaceable feature to the target market?
  • What type of licensee will be attracted to protect your patent?

Once you know the potential of your patent for licensing, it is time to find the proper licensee for maximum revenue and benefits.

First, evaluate your patent portfolio. Prioritize licensing the valuable patents, keeping the low-quality patents for later. Second, consider the forward citations of your patents because companies are referring to your patent, maybe your potential licensees. One crucial factor is to ensure that your licensee practices in the same country where you have your patent; otherwise, you will not be able to stop infringement if you do not own the patent in that country.