Serving the Agricultural Biotechnology Community of North America  

Licensing

A license is permission. A license is an authorization to use someone’s intellectual property or trade secrets on contractually specified terms.  It is permission with conditions. Technically a license is an estoppel it precludes the owner of the IP from suing the user as along as the user is in contractual compliance. 

It is worth repeating that an intellectual property (IP) license concerns an intangible (e.g. patent) that is infinitely divisible and inexhaustible.  Therein lies the value of IP.

At its most basic, a licensor seeks to economically exploit its property, while a licensee seeks to use that property to generate income for itself. More specifically a licensor seeks amongst other things:
  • Exploit IP for which the licensor does not have the business infrastructure;
  • Cross license to gain access to IP necessary to its product or process;
  • Extract economic value from non-core business assets; and
  • Extract value through a non-competing use license
Conversely a licensee may seek any of:
  • Technology crucial to its product or process;
  • Avoid infringement issues;
  • Develop an ongoing relationship with the licensor; and
  • Remove a competing product or process
The core elements of a license (sometimes known are a bare license) are:
  • Grant (exclusive, sole, non-exclusive)
  • Subject matter
  • Territory
  • Term
  • Field of Use
  • Consideration (royalty)
  • Sub-license Rights
By adjusting the grant, territory, term and field of use one can readily see how IP as an intangible becomes infinitely divisible and inexhaustible.
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