Patent License Agreement: What You Need to Know

Patent License Agreement: What You Need to Know

Whether you’re creating or exploring one, it’s important you fully understand what a patent license agreement is and how it functions. Find out here.

Developing intellectual property comes with countless benefits, such as creating a product or selling your idea to others. However, it also comes with inherent risk. People who come up with original ideas often fear they will end up in situations similar to the most notorious trademark cases.

Patent licensing can help you protect what’s rightfully yours, but not everybody understands how to navigate patent law. Let’s explore patent license agreement examples and how you can leverage patent services to meet your needs.

Understanding Patent Licensing Agreements

These are documents that establish agreements between a patent owner and a licensee. They clearly define licensing terms, such as information about the sale, make, and use of the patent. They also establish ownership of the patent so there’s no ambiguity.

The agreement is generally in effect for a fixed amount of time. The licensor is often in an advantageous position, but this will vary from case to case depending on negotiations. Without a proper patent license agreement in place, the patent owner risks people using their intellectual property incorrectly.

Types of Patent License Agreements

Understanding the different types of patent license agreements can help you navigate the obstacles you face. This knowledge will also help you use the most appropriate agreement for your situation. Let’s explore this topic in detail below.

Exclusive Patent License Agreement

As the name implies, this agreement indicates the licensee is the only one who can exercise the rights of the IP. The licensor is prohibited from granting a license to other parties after an exclusive agreement is in effect.

Keep in mind that an exclusive license and a sole license aren’t the same. A sole license means the licensor is providing a license to a grantee and nobody else. However, the license owner can still exercise the rights being granted.

To clarify, let’s assume you created an IP that’s used in a mechanical product. You grant a sole license to a manufacturer. Both you and the other party can use the IP.

However, an exclusive license prevents you from doing so. It’s important to understand this difference so you avoid legal issues in the future. It wouldn’t be impossible for a licensee to take legal action against you based on your behavior after granting an exclusive license.

Nonexclusive Patent License Agreement

Nonexclusive licensing allows the licensor to grant IP rights to as many parties as they wish. The patent owner also retains the right to utilize their patent. Since the patent owner can establish agreements with multiple parties, the profit potential is far higher.

However, it’s worth noting that an individual nonexclusive license agreement is worth less than an exclusive one. Someone looking to be the only party that utilizes an IP will need to pay much more for their agreement.


If the patent agreement is a valid and enforceable contract, legal action can be taken upon infringement. However, the contract must contain certain details, including the following:

  • All relevant terms and conditions
  • License duration
  • Royalty rates and field of use

The agreement must also comply with intellectual property laws. Complications can arise in some circumstances if the licensor behaves appropriately.

For instance, let’s assume the licensor granted an exclusive license to two separate parties. One of the parties infringes upon the patent agreement guidelines.

The patent owner then attempts to take legal action. However, the owner of the patent is inherently at fault due to providing multiple exclusive licenses for the same IP.

Situations like these can easily spiral out of control. It’s best to work with an attorney to determine the enforceability of the agreement. For instance, there may be an issue with your patent validity.

The agreement could also infringe upon compliance laws. Overcoming obstacles like these is crucial for preventing further problems.

Finding an Attorney

The best way to handle a patent license agreement is by working with a reputable attorney. They have the tools and resources to help you get the results you need. When searching for someone to hire, consider their past reputation.

See what other people have to say about the results they got. There should be no shortage of positive feedback.

However, you’ll need to keep an eye out for fake reviews during your search. These are often posted in large batches and contain many of the same keywords. They can be positive or negative, and it’s best to ignore them entirely.

What is their pricing structure like? The last thing you want is to encounter financial surprises. Keep in mind that you often get what you pay for when choosing attorneys.

It’s never recommended to go with the cheapest option. This doesn’t mean that you need to work with the most expensive professional.

There’s a point of diminishing returns regarding how much you budget for. Somewhere in the middle of the industry’s price range can help you meet your needs without overspending.

Don’t hire someone who’s not experienced in this area of law. Even if they say they can help you, you should avoid lawyers who don’t have at least a decade of experience in this concentration. Communicativeness is a key attribute to consider, as well.

If they aren’t easy to get in touch with, you won’t be able to get the results you need. Don’t be afraid to continue your search elsewhere if you have a hard time communicating with them. With enough due diligence, you shouldn’t have an issue finding the right choice for your needs.

Never Neglect a Patent License Agreement

Without the right patent license agreement, you risk having your intellectual property infringed upon. The information in this guide can help you take the necessary steps to protect your ideas. Just be sure you find the right professional.

At Berkeley Law and Technology Group, we pride ourselves on offering premier legal assistance with patent law. Our professional team has a proven track record of helping our clients come out on top. You’ll learn more about the benefits we offer when you get in touch with us today.

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