An out-licensing program can be lucrative for a company, but all licensing programs are accompanied by administrative costs that potential licensors should consider before embarking on a licensing effort. The potential licensor will need to allocate resources towards a variety of tasks, including, supplying information to potential licensees about the technology, protecting the technology, negotiating the licenses, monitoring the use of the technology by the licensees, and collecting/monitoring royalties, just to name a few.

1. What is Out-Licensing
Prepared By: Ony Okoro

2.  Licensing is, perhaps, the most common
commercialization pathway for a company, outside
of having a technology owner exploit the
technology itself. Licensing occurs when the owner
of a technology (or other entity with rights to a
technology), the licensor, grants a third party, the
licensee, the right to exploit the technology in some
fashion.

3. Out-licenses
 Which involve a company licensing its technology to a
third party in exchange for royalties or other
consideration
In-licenses
 which involve a company acquiring the right to use the
technology of a third party in exchange for royalties or
other consideration.

4.  Generate income
 To enable a second source
 To improve market strength
 To minimize legal cost
 Expand into an export market niche through
regional licensing

6.  If a company is not making or selling products
incorporating a certain technology, out- licensing
can provide an avenue for generating income from
an under-utilized technology.

8.  A company may license a technology to a
competitor if the company is unable to manufacture
a product in-house, or of the market is reluctant to
accept a device that has only a single source.

10.  Licensing can be used strategically to stimulate
market demand for a product, by establishing
certain licensed marks or methods as the standard
within an industry.

12.  Licensing can be used to neutralize infringers,
thereby avoiding the legal expenses associated with
an infringement claim.

14.  Licensing can also be used to generate revenue in
markets where it may not make sense for a
company to have an actual sales presence.

15.  An out-licensing program can be lucrative for a
company, but all licensing programs are
accompanied by administrative costs that potential
licensors should consider before embarking on a
licensing effort.

16.  The potential licensor will need to allocate
resources towards a variety of tasks, including,
supplying information to potential licensees about
the technology, protecting the technology,
negotiating the licenses, monitoring the use of the
technology by the licensees, and
collecting/monitoring royalties, just to name a few.

17.  For more information contact:
 Ony Okoro at okoro.ony@apex-legal.com