2. โข Licensing is a contract between a minimum of 2 parties wherein the licensor
agrees to allow the licensee to share the rights enjoyed by the former subject to
consideration by the latter.
โข Since it is a contract, it must satisfy all the essentials mentioned under Sections
10 and 11 of the Indian Contract 1872, i.e., the contract must be between the
persons who are major, of sound mind and not disqualified from contracting
under any law.
โข In an intellectual property license, the licensee is permitted to use the intellectual
property, however it is subject to conditions and payment of consideration.
โข After signing up the contract, is the licensor permitted to use the
intellectual property?
3. There are two main approaches to patent licensing โ
1. Carrot approach
2. Stick approach.
Carrot Approach
In this โfriendlierโ approach, the patent owner (and potential licensor) must persuade
the potential licensee to license the patent. In this case, the potential licensee has not
infringed the patent at issue, and they can simply refuse to license the patent. So, it is up
to the patent owner to convince the potential licensee that the product, design, or
technology covered by their patent will benefit the potential licensee in some way,
usually by helping them to make money.
Stick Approach
In this more โseriousโ approach, it has already been determined that the potential
licensee has infringed the patent at issue and is using the technology in the patent in
some way. The โstickโ in this approach is litigation, and the basic message is that the
potential licensee must license the patent or face a lawsuit.
4. After signing up the contract, is the licensor permitted to use
the intellectual property?
5. The types of intellectual property licensing are
โข Exclusive License:
โข Involves the exertion of intellectual property rights of the licensor by the licensee to the exclusion
of all, including the licensor.
โข Thus, only the licensee is authorized to use the intellectual property.
โข Exclusive licenses also include the enforcement rights of the patent.
โข Licensee holds all rights to the patent, except for ownership, meaning that the licensee can sue
infringers.
โข Non-Exclusive License:
โข This type of license permits multiple licensees to produce the invention, design, or technology,
without any exclusive rights.
โข Allows for the licensee to exercise the rights, as well as keeping the scope for the licensor to
exercise the rights and licensing these rights to any other third party.
โข Sole License:
โข The licensee is permitted to use the intellectual property, and the licensor is also authorized to
6. Partially Exclusive License:
Grant exclusivity to certain applications of a patent, geographic limitations, or a
term period. For example, a partially exclusive license for an infrared sensor patent
is limited to medical use and cannot be used for military or surveillance
applications.
Compulsory license:
The patent owner is forced by the government to allow others to use their patent
for a set fee, mostly seen in the pharmaceutical industry.
Sub-licensing:
The right to license a technology to a third party by the licensee.
It is clearly stipulated in the original license agreement between the licensor and
licensee.
7. Which license agreement (Exclusive or Non-exclusive) are more likely to
include sub-licensing rights? Non exclusive license
9. How to Find Potential Licensees?
โข Owning a patent does not guarantee revenue generation from it.
โข Evaluation of IPR marketability is crucial before any investment is made.
โข Does the specific patent provide an irreplaceable feature to the market?
โข What type of licensee may be interested in your patent protection?
โข Companies that have cited the patent for reference may be potential targets.
โข Potential company (licensee) should be practicing in the same country that you
have the patent in, if you do not have the authority to practice in that country, you
cannot stop others from using the technology.
12. Why you should:
1. Avoid the hassle of running a business
You can let others take this on and simply enjoy the royalties a licensing agreement can
provide.
2. Reduce investment in commercializing
3. Enter markets faster
4. Retain your ownership of the patent: Licensing only grants the use of a patent. With
ownership, you can enforce your patent by suing infringers.
Why you shouldnโt:
1. Hold on to your technology
If the invention or technology in the patent is an important part of your business strategy.
2. Lose autonomy of the invention
You could end up failing to make any money if the licensee is unsuccessful in its efforts.
3. Licensing is not a quick-cash solution
Nearly all patent licensing agreements are paid through royalties. If you are looking for a
larger lump sum, you can consider selling the patent.
13. Advantages and Disadvantages of Licensing
Advantages for the Licensee
Advantages for the Licensor
Disadvantages for the Licensee
Disadvantages for the Licensor
14. Further, the World Intellectual Property Organisation broadly categorizes intellectual property
licenses under:
1. Technology License Agreement: In this license, the licensee is permitted to exercise rights
related to patents, utility models, or know-hows protected by a trade secret owned by the
licensor. The licensee is, thus, authorized to use the technology under certain conditions.
2. Franchise or Trademark License Agreement: Trademarks are a way of distinguishing the
goods and services of one enterprise from another. The franchiser has usually gained a
reputation for his trademark and via a license agreement, authorizes the franchisee to make
use of the trademark under certain conditions like maintaining the quality of goods and
services since the goodwill of the trademark is at stake. The franchisee may provide financial
resources or his own expertise.
3. Copyright License Agreement: Copyrights are granted over creative works such as music,
cinematograph films, artistic works, etc. In order for them to be reproduced and published by
others, there must a be copyright license agreement between them authorizing the licensee
to exercise rights over the copyright owned by the licensor
15. What is the time frame for signing the license agreement?
Must it be completed in time for:
โข A product launch
โข A press release
โข A trade show or conference
โข Beginning a research project
โข Commencement of manufacturing or sale
โข An investment or acquisition/sale transaction
16. โข Can you see the technology before you commit?
โข What is the territory?
โข What is the subject matter of this license?
โข Who owns the IP that underlies the technology?
โข Is the thing that is being licensed completed?
โข How much will the licensee pay for the use of the technology?
โข The cost method
โข The income method
โข The comparables or market method
โข How will the licensee pay?
โข When to use cross-licenses and covenants not to sue?
โข What are performance/ warranties/indemnities?
โข How does licensing relate to financing of joint ventures and corollary
activities/pricing of products?
โข Will the licensee receive rights to future releases, versions, and
products?
โข Are service and support/ spare parts included in the license?
17. Indian National IPR Policy came out in the year
A. 2016
B. 2000
C. 2001
D. 1970
18. How long is a patent valid in India?
A. 30 years
B. 20 years
C. 40 years
D. 60 years
What Cannot be patented in India?
A. a computer program
B. scientific theory
C. mathematical method
D. All of the Above
An application for a patent shall ordinarily be published after
A. 12 months
B. 18 months
C. 24 months
D. 36 months
19. Discovery of a new galaxy is
A. a patentable subject matter
B. non-patentable under section 3(a) of Indian Patent Act 1970
C. non-patentable under section 3(b) of Indian Patent Act 1970
D. non-patentable under section 3(c) of Indian Patent Act 1970
Patent is not granted for
A. new technical solution to a problem
B. Process
C. Product
D. an idea or principle
20. Following person/persons are entitled to apply for patents
A. A person claiming to be first inventor of the invention
B. A Legal representative of the first inventor of the invention (If he deceased)
C. Any person who is the assignee of the first inventor of the invention
D. All of the above
A National Phase Application may be filed in India because India is a member of
the
A. WHO
B. UNICEF
C. PCT
D. All of the above
21. Upon obtaining a provisional patent, the inventor/inventors may use _____ tag
when they try to find the commercial potential of their new design/process.
A. Patent completed
B. Patent resume
C. Patent pending
D. Patent submitted
22. Every application for a patent shall be for ---- invention only and shall be filed in Form-1 at an
appropriate office
A. One
B. Up to four connected inventions
C. Multiple inventions with a provision of special fees to be charged for it
D. One major invention and one minor invention
24. A. Common Names, Names of community and person should be avoided
B. Coffee business must not have a trademark
C. Nature of business should not be a part of trademark
D. It is already taken by someone
25. Which court has the jurisdiction to entertain a trademark infringement suit?
A. High Court
B. Special court
C. Supreme court
D. Labour court
26. โExclusive licenseโ means
A. A license from a patentee which confers on the licensee
B. A license from the Patent registrar โ
C. A license under Patent Cooperation Treaty
D. A license from a patentee to multiple companies
โExclusive licenseโ to a company supports
A. Monopoly of businesses in longer run
B. Wider manufacturing of products by number of enterprises
C. Rights of patentee to set up and collaborate with multiple
ventures
D. All of the above
