Patents help protect unique products. Companies that develop new technology or that improve on existing products can patent their new products to prevent others from directly profiting from the company’s research and development.
Patents can provide organizations with a competitive advantage. If consumers can only get the best product from one company, the company that holds the patents may dominate the market. Competitors and companies in adjacent industries may sometimes want to use patented products or create their own version of a patented product. In those situations, negotiating a licensing agreement can protect against infringement and create an alternate stream of revenue.
What is patent licensing?
Patent licensing is essentially the process of negotiating an agreement to allow another party to use the information protected by a patent. A company developing gaming computers might license technology related to wireless internet connections or cutting-edge graphics cards.
Licensing agreements typically impose restrictions on the use of patented concepts to help prevent infringement. They also establish a price for the use of patented products. Some companies pay per item based on their sales or production rates. Other businesses may pay an annual fee for licensing privileges.
Negotiating a licensing agreement can provide a company with a secondary stream of revenue in addition to product sales. A patent licensing agreement can prevent parties that may have infringed on a company’s patent and harmed its bottom line from reverse-engineering a product to duplicate it.
Those hoping to protect patented products may need help with the process of prosecuting a patent, enforcing a patent and licensing the patent. Partnering with a lawyer familiar with intellectual property law can make it easier for businesses to obtain and maintain their patents.