Licensing

Contracts General

The philosophy I teach my law students  is apply the law to the deal, not the deal to the law. So creativity and risk management are fundamental to success.  Quick and effective communication facilitates that approach.

Licensing Specifically

A license is permission, nothing more. A licence is an authorization to use someone?s intellectual property or trade secrets on contractually specified terms.  It is permission with conditions. Technically a licence is an estoppel? it precludes the owner of the IP from suing the user as along as the user is in contractual compliance.

It is worth repeating that an IP licence concerns an intangible that is infinitely divisible and inexhaustible.  Therein lies the value of IP.

At its most basic, a licensor seeks to economically exploit its property, while a licensee seeks to use that property to generate income for itself. More specifically a licensor seeks amongst other things:

  • Exploit IP for which the licensor does not have the business infrastructure;
  • Cross licence to gain access to IP necessary to its product or process;
  • Extract economic value from non-core business assets; and
  • Extract value through a non-competing use licence

Conversely a licensee may seek any of:

  • Technology crucial to its product or process;
  • Avoid infringement issues;
  • Develop an ongoing relationship with the licensor; and
  • Remove a competing product or process

The core elements of a licence (sometimes known are a bare licence) are:

  • Grant (exclusive, sole, non-exclusive)
  • Subject matter
  • Territory
  • Term
  • Field of Use
  • Consideration (royalty)
  • Sub-licence Rights

By adjusting the grant, territory, term and field of use one can readily see how IP as an intangible becomes infinitely divisible and inexhaustible

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