Patent Licence

WHEN YOU SHOULD USE THE PATENT LICENCE AGREEMENT

The Patent Licence Agreement should be used if you are licensing registered patents and other intellectual property rights to a third party in the territory for a specific term.  If the technology is not protected by a patent, then a different agreement will be required.

Limitations

The Patent Licence Agreement should not be used and will require amendments if it is to be used where:

• the patent is not yet sealed;
• no more than one patent is involved;
• minimum sales volumes for the patented product are required by the licensee;
• the licensor requires the licensee to adhere to standards of manufacturing and quality control;
• the licensor or licensee is a trustee company;
• the licensee wishes to export the products overseas or into other territories;
• the licensee is not the manufacturer;
• the licensee will be also licensed to use the licensor’s trade marks.

Why do you need one?

You will need a Patent Licence Agreement if you are a patent owner and want to:

• allow another party to manufacture and/or market the technology embodied in the patent;
• grant the rights to use and develop the inventions disclosed in the patents to a third party in a territory; 
• secure payment for royalties;
• protect your goodwill in the use of the patent and other intellectual property rights;

Risks of not having one

If you license your patents without an agreement some of the risks may include:

• loss of ownership of intellectual property rights to any improvements or modifications;
• disputes in relation to the payment of royalties;
• the goodwill and value of your patent may be damaged if products do not adhere to applicable standards of manufacturing and quality control;
• loss of opportunity to commercialise the invention;
• valuable confidential information and trade secrets could be lost to competitors; and
• loss of income to pay for maintenance of the patent.