Patent & Technology Licensing with Joseph Yang


Licensing transactions are becoming more complex than ever. At PLI’s Advanced Licensing Agreements 2012 seminar last week, Joseph Yang, Founding Partner of PatentEsque Law Group, LLP and Co-chair of the seminar, lead the panel entitled, “Patent & Technology Licensing”. He discussed the most common mistakes that occur when licensing patents, and shared personal tips on how to avoid making the mistakes that could gravely cost you later.

Technology vs. Intellectual Property

Patent licensing and technology licensing are very different. A patent is a legal right to stop someone from utilizing technology covered by the patent. Often, when someone takes a patent license, they don’t even need your technology.  So the motivation for taking a patent license is for the licensee to be able to utilize its own (infringing) technology without being sued. In contrast, when someone wants a technology license,  it usually doesn’t have its own technology, and needs access to yours. Typically, the technology licensee doesn’t even care if you have a patent. Understanding these differences is key to structuring a license to cover what you mean to gives (but not more). When patents and technology are co-mingled in a contract without the intention to give away both, it could cause big problems. Tips: Be careful to define “Technology” and “Patents” separately in a contract, rather than commingling them. 

A Promise to Grant is not a Grant

An agreement to grant is not an actual grant. It is merely a promise that doesn’t convey any rights. A separate transaction will be required to convey rights. A promise to grant may not be enforceable against a Bona Fide Purchaser either. So when A makes a promise to grant to B, and A subsequently grants the same thing to C, in some cases, C can take precedence over B. There are many types of grants: assignment, exclusive license, nonexclusive license, and covenant not to sue. The label you put on a grant isn’t determinative; the grant itself has to have the features of what the law requires it to be. Tips:  Always get a present grant even if it’s a future right. 

Enforcement Rights vs. Grant Types

Enforcement rights are not independent of the grant type. An assignee owns the entire right, title, and interest in a patent, and can sue across all fields of use. An exclusive license must have received beneficial ownership of the right to prevent others from making/using/selling the underlying patent in some field of use; if so, it can sue in that field of use. A non-exclusive licensee has only freedom from suit, but no standing to sue others. Tips: You cannot grant a non-exclusive licensee right to sue. When an exclusive licensee wants to sue, it has to do so in the patentee’s name. If the exclusive licensee is unable to get the patentee to join the case, it won’t be able to litigate the matter. If you want to be able to sue yourself,  you’ll want to make sure you’re an assignee and not an exclusive licensee.

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