Patent Licensing

Typically, in a licensing agreement, The patent licensors and the licensee usually negotiate an agreement to license a patent after it has been developed (or when it is licensed). The process of licensing a patent that allows you to make, use, and sell your product on the market is a mutually beneficial agreement between you and the company or individuals in charge of the patent. You retain ownership of the invention if you hold a patent and enjoy royalty payments when you manufacture the product.

Licensing types available for patents:

Exclusive License

Under an Exclusive License, the patent holder transfers ownership of the invention to the licensee. In essence, the patent holder only retains ownership of the title. The patent is not transferable to a third party.

Non-exclusive License

More than one party can claim control of the patent in this system, and they can each bring it to market with the patent license.

Sub Licenses

An organization that has this right has the right to license it to different organizations for the production of that product. A third party licensee and primary licensee will agree on profits and losses, respectively.


An exchange of licenses could be conducted between corporations and creators in this process. In order to be successful on the market, an invention needs other products to support it.

Compulsory License

Governmental licenses are when someone else is allowed to utilize your patented invention - even against your will - for a stipulated fee.

Voluntary Licensing

It is a sign of good will towards society when licenses are freely given.

Carrot License

Potential licensees who do not practice the patented invention and are not obligated to take a license can use this licensing approach. In the licensing process, patent owners give licensees an insight into how their patents might be used.

Stick Licensing

A stick licensing approach is completely opposed to carrot licensing. A prospective licensee may use this licensing approach when he or she is already using your patented technology and infringing your patent.

Patent licensing: reasons to consider it:

  • A business owner will avoid the hassles involved in running it
  • He or she will reduce investment in commercializing their business
  • A quicker market entry can be facilitated
  • Patent ownership can be retained

There are several reasons why we should not license a patent:

You need to hold onto your technology in order to prevent losing ownership of your invention as The licensing process does not provide instant revenue

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