What is Intellectual Property?

Intellectual Property (IP) is a term used to describe the products of human ingenuity which can be owned and dealt with as a form of property due to a body of laws relating to patents, trademarks, industrial designs, copyright, plant breeder's rights and chip protection legislation. These laws give the IP owner the right to prevent others from using the invention or other subject matter related to the IP without its owner's permission.

How can one use IP?

There is an analogy between the way one can use a real property, such as a house, and the way one can use an IP. For instance, one can protect oneself from the physical environment in the premises of one's house in the same way as one can protect oneself from the competitive environment by operating within one's own Intellectual Property Rights (IPRs). Moreover, one can rent out one's house as one can license one's IP and allow others to use it at a specified cost. Finally, one can sell one's house just as one can sell an IPR through a process known as an assignment.

What Is a Licensing Agreement?

A Licensing Agreement is a partnership between an IPR owner (Licensor) and one who is authorized to use such Piers (Licensee), in exchange for an agreed payment (Royalty Fee).

What are the types of Licensing Agreements?

Licenses can be either 'exclusive' or 'non-exclusive'. An exclusive license grants the Licensee the right to use the IP to the exclusion of all others including the Licensor; however, in the case of a 'non-exclusive' license, the licensor can license the same IP while maintaining rights to the IP. It is also possible for a license to be a 'sole' license in which case the Licensor reserves the IPRs to him/herself.

Why does the license include a territory?

IPRs are typically granted on an international basis but are also occasionally granted on a regional basis. When granting a license, it is usual to indicate the country or countries which are included in the Licensed Rights. Some licenses are granted on a world-wide basis covering all countries in the world; others are granted for only a part of a country.

How long does a license usually last for?

The term of a license varies according to the type of technology being licensed due to the different protection terms that every technology has. The term of the license may be one of a life-term a partial life-term or the remaining of the life of such IP being licensed.
You can find more information on our free-of-charge “Guidelines to Licensing & Technology Transfer Agreements” booklet at www.lesarab.org .

Can I license someone my idea without getting a patent or other IP form?

Ideas can be copied unless they are either covered by some form of IPR or if the person has received the information upon a confidentiality agreement. If you want to license an idea, it must either be covered by a patent application or some other IPR or alternatively, the idea must have been received by the intended purchaser in confidence. Given that it is generally difficult to get a potential purchaser to agree to receive confidential information from a stranger, it is therefore usual in practice to file for some IP form.

What should I do to license my idea now that I have filed a patent application or an application for some other IP form of protection?

Firstly, make inquiries from the industry itself to know whether the idea may be applicable or in fact original. This may involve conducting a patent search, which can be done initially on the Internet. If you are confident that your idea is new, then your next step should be to identify the particular advantages your idea may offer to users, or manufacturers. You also need to highlight any disadvantages that it may have. The following step is to identify the market sector(s) that your idea may offer most value to.

How can I find someone to license my IP to?

After identifying the appropriate market sector(s) which your idea will aim to target, the next step you should take is to organize a list of the names of companies that are active in that particular market or which have complimentary skills and resources so that they could readily to enter that market.

What sort of terms and conditions are usually included in a license?

There are whole books written on the terms and conditions of licenses that indicate the following: What is being licensed (including whether improvement inventions are included); on what territory is it being licensed under; for how long is it being licensed for; whether the License is exclusive or not; whether there is any field of use restrictions, accounting provisions, termination provisions; the compensation payable for the License; and a host of other more routine issues. You can find more information on our free-of-charge “Guidelines to Licensing & Technology Transfer Agreements” booklet at www.lesarab.org

What am I likely to receive in consideration for the grant of a license?

It is quite common for a License Agreement to include one or more of the following components: An up-front payment; a running royalty; and a minimum royalty. The exact details of the consideration are usually the subject of negotiation between both parties. There are no hard and fast rules as to what is reasonable. What is important in a license is that each party receives a fair proportion of the profit derived from the IPRs exploitation.

How is a reasonable royalty determined?

A royalty is often calculated as a percentage of the net selling price of the goods or services sold by the Licensee. In other cases it is a fixed amount per sale. Surveys have shown that royalties paid in connection with License Agreements can range between 0.1% to 50% of the net selling price. This is a very wide range and shows that each case needs to be considered on its merits. To start the process of determining a fair royalty, it is often appropriate to prepare a business plan to try and calculate the profit that a licensee may make from working the license (not clear). It is sometimes said that a fair royalty is one that, over the life-term of the License, gives the Licensor about approximately 25% of the profit made by the Licensee from the exploitation of the IP. This is only a guide and is appropriate in only some cases. If you are a member of the Licenses Executives Society (LES) you can find out more about this topic in the members-only section of the library on this web site. You can search through the LES quarterly journal, Les Nouvelles, and a number of other publications by key word.

 

How can LES-Arab Countries help me in licensing my technology?

LES-Arab Countries (LES-AC) is a society consisting of individuals involved in the profession of licensing and other aspects of Technology Transfer and IPRs. By becoming a member of LES-AC, you can access the knowledge and resources of LES-AC, LES International and all the world's regional societies. As a member, you will receive the quarterly journal of LESI, Les Nouvelles, which contains informative articles about licensing and related topics. In addition, you will also receive a copy of the Membership Directory containing details of membership in LES national groups around the world, accessible by name, name of company, as well as by geographical location. You will also be updated with details of LES annual meetings around the world where you can meet other members and exchange ideas and experiences. You can also access the "Members-Only" section of this website, along with the LESI website, which yield a considerable amount of material regarding the licensing and commercialization of IP.

What is Technology Transfer?

The overall process by which knowledge is moved from its origin for the purpose of direct use or commercialization in order to reach the world market place in the form of new or improved products, processes, or services, resulting in economic and social prosperity.

What are the benefits of Academic Technology Transfer efforts?

The licensing of innovations by universities, hospital learning centers, research institutes and patent management firms, known as Academic Technology Transfer, refunds and supports the economy by creating new industries and opening new markets. Most importantly, Technology Transfer has led to the creation of new products and services that improve our quality of life.

How does the public benefit from university-industry partnerships?

When industries license technologies from universities, continuing collaborative partnerships will often help new discoveries to be transferred from the laboratory to the marketplace. Partnerships enable researchers who make initial discoveries to participate in further developments. Generally, the involvement of the original creators in the continued development of the technology will significantly reduce the time to actual commercialization.