Patent Licensing

Patent Licensing Hasit Seth Pune, India hasits a-t gmail.com

Outline
Patent License
Kinds of Patent Licenses
License Contents
Licensing Strategies
Anti-trust and Licenses
Compulsory Licensees
License Negotiations

Patent License
A permission to exercise patent rights – a permission to make, use, offer for sale, sell or import a patented invention

Patent Rights Mechanism
Assignment – Total transfer of rights. Assignor retains no interest or right after the assignment is complete.
PTO keeps track of assignments, not necessary to register it, but recording has benefits
License – partial transfer of right

Kinds of Patent License
Exclusive patent license
Non-exclusive patent license
Royalty-free license
RAND license (Reasonable and Non-discriminatory license)

Law Regulating Licenses
Contract Act
Anti-Trust Laws (US); MRTP/Competition commission

License Contents
Background and Recitals – parties, intentions
Definitions
License Grants – exclusive/non-exclusive, limits
Best efforts, Issue fees, Milestone Payments, and Royalties
Technical Assistance and Know-How

License Contents
Warranties and Representations – unencumbered title and right to grant license
Term and Termination
Most Favored Nations Clause – non-exclusive licensees, not good for licensors
Third-Party Infringements
Indemnification
Arbitration and Bankruptcy Clauses

License Contents
Transferability – on M&As, succession, etc.
Right to sub-license
Recording and Reporting
Rights and Obligations of parties
Scoping

Non-Exclusive License
Grant Clause
Subject to terms and conditions of this Agreement, LICENSOR hereby grants to LICENSEE a nonexclusive, nontransferable, (except under this agreement) license under LICENSOR’s Patent Rights to make, use and sell Licensed Products in the territory of India and its possessions.

Non-Exclusive License
Non-refundable License Fees

Licensing Strategy
Why license to competition?
License terms too controlling?
Opportunity Cost, Can we re-enter the market?
In-licensing and out-licensing (Big Pharma, Semiconductors and Automotive)
Patent Pools
Non-exclusive licencees interse

Anti-Trust and Licensing
Licensing can reduce anti-trust risk, particularly non-exclusive licensing

Royalties
Damages are never less than reasonable royalties
What is a reasonable royalty?
Industry estimates of royalties – data very hard to trust and very less availability

Compulsory Licenses
Not in US!
Indian Law

License Negotiations
Negotiation strategies
Focus on interests, not personalities
Start with easy to agree issues first, then the tough ones
Negotiation styles

Patent Licensing

by HASIT SETH on Nov 25, 2009

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Patent Licensing — Presentation Transcript