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Transcript of Licensing
Licensing at the IP/Licensing Clinic
Set Squared, University of Southampton27 November 2007
Bernard BrooksBusiness Adviser - Innovation
Business Link South East
Licensor Licensee MarketKnowledge/Intellectual Property
Revenue£££££
Royalties/License fee £
Product or process
Inventor/SME/University
Market supplier of related
products/processes
Customers
What is Licensing?
What is Licensing?
Licensing is a process whereby the licensor confers upon a licensee, by agreement, the legal right to use the intellectual
property owned by the licensor.
It is often used when the owner of a product/process does not have the necessary expertise, resources, time or indeed the inclination to successfully manufacture/operate/market the particular product/process. The owner grants a licence to a third party who has the requisite business acumen, knowledge and experience to operate, manufacture and market the product/process in a certainterritory on behalf of the owner, in exchange for some consideration, such as a royalty on sales for the duration of the contract.A shorthand definition of a license is "a promise (by the licensor)
not to sue (the licensee)."
The Benefits of Licensing
Licensing income
Access to production facilities with little or no capital investment
Access to new markets or fields of use with little or no capital investment
Payback on IP development cost
Business partnership
Profiting from residual value in old technology
Can promote cross licensing – access to complementary technology
(Universities) Knowledge Transfer
(Universities) Improved public relations
New source of turnover
Improved utilization of existing production facilities
Broadened or diversified market position
Reduced R&D cost
Organic growth
Getting an easy start
Ditto
Industrial growth/ renewal/diversification
High-tech reputation
To the Licensor: To the Licensee:
How Business Link can helpIs licensing the right channel to market for you?What IP are you licensing? – an IP reviewWhat are you granting?What do you want out of a license agreement?
Your ‘wish list’ of termsAdvice on finding potential licensees and the final selectionHelp with arriving at a draft Heads of Agreement ►(When H of A agreed, hand over to licensing legal professionals to create a binding contract)
What are you licensing?
Your Intellectual Property- an intangible or ‘hidden’ asset of an organisation or an individual
resulting from some creative activity. It often has a commercial value and can take the form of trade marks, registered or unregistered design rights, UK or foreign patents, copyright, confidential information, trade or business names, logos, database rights, know-how, technology and other intellectual property rights whether registered or not in any country.
Intellectual Property ProtectionIP Protection gives you exclusive rights, making it easier to stop other people from copying or using your IP without your permission.Patents, Copyright, Trade Marks, Design Registration
The more IPP you have, the more you have to offer a licensee andthe better negotiating position you will be inMore info on UK IP Office website: www.ipo.gov.uk/whatis.htm
What are you granting?
The licence agreement grants the licensee the rights to use the Intellectual PropertyIt is here that the scope and nature of this permission is specifiedAreas covered are:
What IPR? Where registered, if at all?Use of the IPR e.g. manufacturing, marketing, copying?Territory to be covered?Exclusive, non-exclusive or sole licenseTerm of the licenceAssignment (Sub-licensing)
Contact points for further advice/help
Email: [email protected] Business Link Tel. number: 0845 600 9 006Website: www.businesslink.gov.uk/southeast Business Link adviser:
[email protected]: 01202 587953
Heads of Agreement (or MOU)
A non-binding declaration of an intention to work together towards establishing a contractual licensing agreement It covers the main contractual and legal terms of the proposed agreement, particularly the areas where there is likely to be negotiationIt may include a clause which requests that, for a limited period, you will not negotiate a similar agreement with another potential licensee.
Main areas to be covered under a H of A
The IPR and licensor’s grant of rightsExclusive, non-exclusive or sole rights?TerritoryEach party’s obligationsTermConsiderationWarranties, IndemnitiesSub-licensingJurisdiction ◄