Patent License Agreement

What is a Patent License Agreement?

A Patent License Agreement is a legal contract between a patent holder (the licensor) and a party interested in utilising the patented invention (the licensee).

The agreement allows the licensee to manufacture, use, sell, or otherwise profit from the invention, technology, or process that's under patent protection. In exchange, the licensor usually receives a royalty or a lump-sum payment.

What are the benefits of a Patent License Agreement?

1. Revenue Stream for Patent Holders: Patent holders may not always have the resources or desire to commercialise their invention themselves. Through a Patent License Agreement, they can generate income from their invention without having to manufacture, market, or distribute the product or service themselves.
2. Opportunity for Licensees: For businesses or individuals looking to bring a new product or service to market, licensing a patent can be a quicker and more cost-effective approach than developing their own technology or invention. It enables them to take advantage of an already-existing invention, offering a competitive edge.
3. Innovation Promotion: By sharing the rights to a patented invention, the agreement contributes to the overall advancement of technology and industry. It facilitates the diffusion of technology and ideas, driving innovation and development.
4. Mitigate Legal Disputes: A proper Patent License Agreement helps avoid potential infringement disputes, offering legal protection for both parties.
5. Market Expansion: For the licensor, licensing their patent can help reach new markets that may have been difficult to tap into on their own. For the licensee, it allows access to an established invention to diversify their product or service offerings.