How can Patent Licensing Help You

Securing a patent for an invention is a commendable feat. However, you must try to monetize it as well through patent licensing. This is absolutely crucial in order to reap the benefits of your invention since you invested a lot of time and money on it. It is beneficial for the licensor and licensee.

If your invention belongs to a hotly contested domain in the market, you can get a strong Return-On-Investment. So what exactly is patent licensing and how do license yours? Let’s find out in this article.

Related Article: Benefits of a Patent Paralegal Service.

What is Patent Licensing?

Patent Licensing is a patent owner granting a license to a third party for the use of the patent’s invention. This allows the licensee to make/use/sell your invention either exclusively or non-exclusively in exchange for a royalty. Since you retain the ownership of the patent, you can enjoy these royalties without investing your money in production.

Suggestion for Licensing: It is strongly advisable to grant the license of your patent to a big player in the invention’s domain. A big company which has a stronghold in the market will reach more people with the invention. This benefits both the licensor and licensee. The licensee can afford the production costs and sell the product easily while the licensor makes money off of the profits.

Related Article: How to Obtain Utility Patents?

How is Patent Licensing Beneficial?

We’ve explained the meaning of patent licensing and given you a brief overview of what it entails. Let’s see how it is beneficial for you.

Making Money through Royalty

As discussed before, the licensee will be paying you a royalty to use the patent. This will be beneficial for you to not only get an ROI but also earn profits. Essentially, that will serve as another source of generating income.

No Worries about Investment in Manufacturing

Patent licensing helps if you’re a small entity that cannot invest in the heavy manufacturing costs of large-scale production. Your product will still reach the market and you won’t have to worry about shelling out more money for production.

Wider and Better Market Reach

Through well-thought-out planning and contracts in the licensing agreement, you can improve your market reach. If the licensee has a wide reach in the market, then you can benefit in terms of improving your outreach. A good marketing strategy will help you here. Ensure that the licensee provides information about the fact that technology created by you is a part of the product.
This can also help you enter international markets as well.

Related Article: Patent Filing Process in 3 easy steps

Types of Patent Licenses

Now that you know the benefits of patent licensing, let’s look at the varieties of patent licenses that are available.

Exclusive License

This license involves the transfer of ownership of the patent. Essentially, the licensor is only left with the title of the patent holder. The licensee has all the rights of a patent owner, except it cannot grant the license of the same to anyone else.

Non-Exclusive License

As the name suggests, this license indicates that it can be granted to more than 1 entity. They all can use the patent’s technology to control the market.


This license allows a licensee to further license the patent to another entity. However, the primary party must be in the loop and the profit split will be decided accordingly.


This is a situation where 2 entities can go for an exchange of licenses. This is necessary when a product requires the support of other products to enter a market.

Compulsory License

Such a type of license is generally applicable in pharmaceutical cases. This is a situation where the government instructs an entity to grant a license for its invention. The patent owner has no say in it and has to grant the license to another entity that the government selects. Generally, it happens only in cases where a company sells a drug at a price that not affordable by the majority. So, the government intervenes by allowing another entity to produce the drug and sell it at a lower price.

Voluntary License

This is also applicable generally for pharmaceutical cases. But, it is the opposite of a compulsory license. Unlike being forced into granting a license, the patent holder gives a license as an act of goodwill. The terms for the licensee are very relaxed, with little to no involvement of royalty.

Carrot License

Such a license is useful when the potential licensee is not utilizing the patent and doesn’t have the obligation to do so, either. This license is more of a marketing tactic to acquaint the potential licensee with the benefits of the same. It is up to the licensee to decide whether it fits their plans.

Stick License

This is a reverse situation of the carrot license. Basically, the potential licensee, in this case, is already using your technology, i.e. infringing your patent. Such a situation leaves you in a lot of negotiating power. That is because either the licensee will have to buy the license, or face legal action. Hence, the title “Stick License” deems appropriate.

Related Article: Patent Proofreading Process – Complete Analysis

Need Assistance with Patent Licensing? – Patent Paralegal Force

As you can see, patent licensing can be incredibly beneficial for you. However, this process, while it has a lot of potential, requires intensive research. You must be fully aware of how exactly you can maximize the potential of your patent portfolio.

Hence, you must have an IP expert to assist you with this. For any technology company or R&D, the main concern is to keep track of their leading competitors, dynamically. This can become tricky to do if you are alone or new to this. You should consider hiring a professional like Patent Paralegal Force.

We provide you with patent application monitoring. We alert you on a regular basis about the latest patents in your field of invention. Our fully-functional team of paralegal professionals uses state-of-the-art tools, which reliably provide a bouquet of services. These include docketing for multiple countries, proofreading, end-to-end IDS management, document procurement, data verification and even form preparation and filing. We are currently serving our clients from more than 45 countries. Client satisfaction is paramount to us. So, we offer the best paralegal services at a negligible cost.

Reach out to us to avail our Patent Paralegal Services.

Other Related Articles:

Patent Watch: Why Do I Need It?

Intellectual Property (IP) Paralegals Facts

A Complete Guide to Patent Novelty Search

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