IP Licensing Chapter
This chapter provides a window into the world of intellectual property (IP) licensing, using patents and US law as a case study. While there exist many other types of IP licensing – including trademark, copyright, software, mass media, and character licensing – the rules for which differ in important respects, a discussion of patent licensing in the United States (US) gives a flavor of the nature of IP licensing in general, including its importance for business and the economy, and for ensuring access to the products and other subject matter that IP protects.
Patent owners have the right to exclude others from practicing their claimed inventions. However, many times, retaining and exercising these exclusionary rights may not maximize the value of the IP. Often, patent owners can obtain greater benefit from their IP by licensing some or all of their patent rights to third parties. Such third parties often want to obtain access to a particular technology in order to conduct their business and compete in a particular field or industry. For this purpose, they must obtain licenses to patents owned by others.
While a number of different patent monetization methods have cropped up in recent years to extract value from patents, most of these methods have their foundations in patent licensing. Indeed, traditional patent licensing is the most frequently used technique for "monetizing" (ie, extracting value from) a company's patents.
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