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.
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
5.
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.
7.
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.
9.
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.
11.
12. Licensing can be used to neutralize infringers,
thereby avoiding the legal expenses associated with
an infringement claim.
13.
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