Licensing is basically acquiring permission to use one’s intellectual property with good faith. The best example would be licensing a copyright of a book to other publishers or lending software coding to other IT company.
Ideas can be licensed to another entity only if they are protected.
Always remember that when it comes to international licensing of Intellectual property, your IP must be eligible for protection in other country also.
Steps in Intellectual Property Licensing:
Research and find out an appropriate forum where you can license your IP, it may be either a small firm or a MNC.
There are certain terms which are to be noticed in a License agreement:
License agreement must always been in written format.
Term of Usage- Term of usage must be clearly specified to avoid disputes in future
Geographic Location of use shall be specified, this might be of great benefit in enforcement of IP license agreement. This clause is also useful when it comes to international IP licensing agreement as one country’s IP provision may vary from other.
Interference with the original property- there shall be also a clause which shall throw light upon the mere interference of the IP (Making changes in software coding).
By analyzing the effect of licensing of Intellectual property, one must understand it is positive step to develop the innovation. In particular, one must be able to differentiate licensing agreements in two regimes: in one licensing is feasible; in the other it is not.
Note- The license will be automatically terminated in effect when licensee files an insolvency or bankruptcy. If it is not cancelled, that license can be sold to any other owners for his intellectual property assets. This is really crucial and must be emphasized always during Intellectual Property Licensing.
Parallel Intellectual Property License
Generally, license agreements are granted on generally parallel basis i.e. the right holder and license holder can both use the intellectual property simultaneously. This kind of license is called parallel license.
Consideration for Intellectual Property Licensing
For the time being there is no hard and fast rule for determining the consideration for licensing agreements in general. An upfront cash payment for the license is usually made for a consideration of intellectual property license issue.