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Bernard Brooks, Innovation Adviser at Business Link in the South East talks about licensing.

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  1. 1. Licensing at the IP/Licensing Clinic Set Squared, University of Southampton 27 November 2007 Bernard Brooks Business Adviser - Innovation Business Link South East
  2. 2. What is Licensing? Licensor Licensee Product or Market Knowledge/ process Intellectual Property Royalties/ Revenue License fee £ £££££ Inventor/SME/ Market supplier of related Customers University products/processes
  3. 3. What is Licensing? Licensing is a process whereby the licensor confers upon a licensee, by agreement, the legal right to use the intellectual property owned by the licensor. It is often used when the owner of a product/process does not have the necessary expertise, resources, time or indeed the inclination to successfully manufacture/operate/market the particular product/process. The owner grants a licence to a third party who has the requisite business acumen, knowledge and experience to operate, manufacture and market the product/process in a certain territory on behalf of the owner, in exchange for some consideration, such as a royalty on sales for the duration of the contract. A shorthand definition of a license is "a promise (by the licensor) not to sue (the licensee)."
  4. 4. The Benefits of Licensing To the Licensor: To the Licensee: Licensing income New source of turnover Access to production facilities with little or no Improved utilization of existing capital investment production facilities Access to new markets or fields of use with Broadened or diversified market little or no capital investment position Payback on IP development cost Reduced R&D cost Business partnership Organic growth Profiting from residual value in old technology Getting an easy start Can promote cross licensing – access to Ditto complementary technology (Universities) Knowledge Transfer Industrial growth/ renewal/diversification (Universities) Improved public relations High-tech reputation
  5. 5. How Business Link can help Is licensing the right channel to market for you? What IP are you licensing? – an IP review What are you granting? What do you want out of a license agreement? Your ‘wish list’ of terms Advice on finding potential licensees and the final selection Help with arriving at a draft Heads of Agreement ► (When H of A agreed, hand over to licensing legal professionals to create a binding contract)
  6. 6. What are you licensing? Your Intellectual Property - an intangible or ‘hidden’ asset of an organisation or an individual resulting from some creative activity. It often has a commercial value and can take the form of trade marks, registered or unregistered design rights, UK or foreign patents, copyright, confidential information, trade or business names, logos, database rights, know-how, technology and other intellectual property rights whether registered or not in any country. Intellectual Property Protection IP Protection gives you exclusive rights, making it easier to stop other people from copying or using your IP without your permission. Patents, Copyright, Trade Marks, Design Registration The more IPP you have, the more you have to offer a licensee and the better negotiating position you will be in More info on UK IP Office website:
  7. 7. What are you granting? The licence agreement grants the licensee the rights to use the Intellectual Property It is here that the scope and nature of this permission is specified Areas covered are: What IPR? Where registered, if at all? Use of the IPR e.g. manufacturing, marketing, copying? Territory to be covered? Exclusive, non-exclusive or sole license Term of the licence Assignment (Sub-licensing)
  8. 8. Contact points for further advice/help Email: General Business Link Tel. number: 0845 600 9 006 Website: Business Link adviser: Tel: 01202 587953
  9. 9. Heads of Agreement (or MOU) A non-binding declaration of an intention to work together towards establishing a contractual licensing agreement It covers the main contractual and legal terms of the proposed agreement, particularly the areas where there is likely to be negotiation It may include a clause which requests that, for a limited period, you will not negotiate a similar agreement with another potential licensee.
  10. 10. Main areas to be covered under a H of A The IPR and licensor’s grant of rights Exclusive, non-exclusive or sole rights? Territory Each party’s obligations Term Consideration Warranties, Indemnities Sub-licensing Jurisdiction ◄
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