Patent Licensing


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An overview of IP/patent licensing field. Various strategies and practical aspects of patent licensing are discussed here. Please do NOT consider this legal advice.
[Some material has not been updated for recent changes, so use it at your own risk]
Disclaimer: This is not legal advice.

Published in: Business, Technology
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Patent Licensing

  1. 1. Patent Licensing Hasit Seth Pune, India hasits a-t
  2. 2. Outline <ul><li>Patent License </li></ul><ul><li>Kinds of Patent Licenses </li></ul><ul><li>License Contents </li></ul><ul><li>Licensing Strategies </li></ul><ul><li>Anti-trust and Licenses </li></ul><ul><li>Compulsory Licensees </li></ul><ul><li>License Negotiations </li></ul>
  3. 3. Patent License <ul><li>A permission to exercise patent rights – a permission to make, use, offer for sale, sell or import a patented invention </li></ul>
  4. 4. Patent Rights Mechanism <ul><li>Assignment – Total transfer of rights. Assignor retains no interest or right after the assignment is complete. </li></ul><ul><li>PTO keeps track of assignments, not necessary to register it, but recording has benefits </li></ul><ul><li>License – partial transfer of right </li></ul>
  5. 5. Kinds of Patent License <ul><li>Exclusive patent license </li></ul><ul><li>Non-exclusive patent license </li></ul><ul><li>Royalty-free license </li></ul><ul><li>RAND license (Reasonable and Non-discriminatory license) </li></ul>
  6. 6. Law Regulating Licenses <ul><li>Contract Act </li></ul><ul><li>Anti-Trust Laws (US); MRTP/Competition commission </li></ul>
  7. 7. License Contents <ul><li>Background and Recitals – parties, intentions </li></ul><ul><li>Definitions </li></ul><ul><li>License Grants – exclusive/non-exclusive, limits </li></ul><ul><li>Best efforts, Issue fees, Milestone Payments, and Royalties </li></ul><ul><li>Technical Assistance and Know-How </li></ul>
  8. 8. License Contents <ul><li>Warranties and Representations – unencumbered title and right to grant license </li></ul><ul><li>Term and Termination </li></ul><ul><li>Most Favored Nations Clause – non-exclusive licensees, not good for licensors </li></ul><ul><li>Third-Party Infringements </li></ul><ul><li>Indemnification </li></ul><ul><li>Arbitration and Bankruptcy Clauses </li></ul>
  9. 9. License Contents <ul><li>Transferability – on M&As, succession, etc. </li></ul><ul><li>Right to sub-license </li></ul><ul><li>Recording and Reporting </li></ul><ul><li>Rights and Obligations of parties </li></ul><ul><li>Scoping </li></ul>
  10. 10. Non-Exclusive License <ul><li>Grant Clause </li></ul><ul><ul><li>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. </li></ul></ul>
  11. 11. Non-Exclusive License <ul><li>Non-refundable License Fees </li></ul>
  12. 12. Licensing Strategy <ul><li>Why license to competition? </li></ul><ul><li>License terms too controlling? </li></ul><ul><li>Opportunity Cost, Can we re-enter the market? </li></ul><ul><li>In-licensing and out-licensing (Big Pharma, Semiconductors and Automotive) </li></ul><ul><li>Patent Pools </li></ul><ul><li>Non-exclusive licencees interse </li></ul>
  13. 13. Anti-Trust and Licensing <ul><li>Licensing can reduce anti-trust risk, particularly non-exclusive licensing </li></ul>
  14. 14. Royalties <ul><li>Damages are never less than reasonable royalties </li></ul><ul><li>What is a reasonable royalty? </li></ul><ul><li>Industry estimates of royalties – data very hard to trust and very less availability </li></ul>
  15. 15. Compulsory Licenses <ul><li>Not in US! </li></ul><ul><li>Indian Law </li></ul>
  16. 16. License Negotiations <ul><li>Negotiation strategies </li></ul><ul><li>Focus on interests, not personalities </li></ul><ul><li>Start with easy to agree issues first, then the tough ones </li></ul><ul><li>Negotiation styles </li></ul>