PATENT AND IP LICENSING FAQS

This page answers the most common questions about patent licensing and intellectual property licensing, helping inventors, businesses, and innovators understand how to monetise their IP while protecting legal rights.

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CAN I LICENSE MY PATENT INTERNATIONALLY?

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Yes, patents can be licensed internationally, but protection only applies in the countries where the patent has been granted. An international licensing agreement must therefore take into account which jurisdictions recognise the patent, the applicable laws and how royalties will be managed across different markets. Many inventors choose to work with established local partners who already understand the regulatory landscape, supply chains, and customer base of the target market.

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DO I NEED A LAWYER FOR A PATENT LICENSING AGREEMENT ?

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While it is not a legal requirement to have a lawyer, it is highly advisable. Patent licensing agreements are legally binding contracts that define complex terms, including royalty rates, exclusivity, territorial rights and enforcement mechanisms. A specialist intellectual property lawyer ensures that the agreement is legally robust, commercially fair and enforceable. Without expert legal advice, licensors may risk undervaluing their patent or leaving gaps that could lead to disputes.

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HOW ARE ROYALTIES CALCULATED IN IP LICENSING ?

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Royalties are most commonly calculated as a percentage of the licensee’s net sales that result from the use of the licensed IP. The percentage depends on factors such as the value of the patent, the size of the market and the level of competition. Some agreements may also include minimum annual payments, upfront licence fees or milestone-based bonuses to guarantee steady income for the licensor. The structure of royalty payments is negotiable and should balance the risks and rewards for both parties.

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WHAT INDUSTRIES BENEFIT MOST FROM PATENT LICENSING ?

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Patent licensing is valuable in industries where innovation and technology development are essential. The pharmaceutical and biotechnology sectors rely heavily on licensing to bring treatments to market while sharing development costs. The technology and software industries use licensing to expand the use of protected innovations across global markets. Consumer goods, fashion and entertainment companies frequently engage in trademark and copyright licensing to strengthen brand presence. Emerging fields such as renewable energy, clean technology and artificial intelligence are also becoming major areas for IP licensing opportunities.

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CAN I LICENSE MULTIPLE TYPES OF IP IN ONE AGREEMENT ?

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Yes, it is possible to license multiple forms of intellectual property within a single contract. For example, a company developing a new product may license patents covering the invention, trademarks for branding and copyrights for associated software or marketing materials. Combining different types of IP under one agreement can simplify negotiations but requires precise drafting to ensure each category of IP is correctly protected.

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WHAT HAPPENS IF A LICENSEE BREACHES A LICENSING AGREEMENT ?

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If a licensee breaches the terms of an agreement, such as by failing to pay royalties or misusing the intellectual property, the licensor has the right to enforce the contract. This usually begins with a formal notice of breach, giving the licensee the opportunity to resolve the issue. If the problem is not corrected, the licensor may terminate the agreement and pursue damages through legal proceedings. Well-drafted agreements include clear enforcement clauses to protect the licensor’s rights.

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IS LICENSING BETTER THAN SELLING MY PATENT OUTRIGHT ?

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Licensing allows you to retain ownership of your patent while generating recurring income, making it attractive for inventors who want long-term involvement. Selling a patent provides an immediate lump sum but transfers ownership permanently. The decision depends on your commercial strategy, financial needs and whether you want to remain involved in ongoing partnerships. Many inventors choose licensing because it offers flexibility and the potential for greater long-term returns.

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CAN I LICENSE A PENDING PATENT ?

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It is possible to license a pending patent, but it is less common because the outcome of the application is uncertain. Licensees may be hesitant to invest heavily until the patent is officially granted, which often results in reduced royalty rates, conditional payments or agreements tied to future approval. While licensing a pending patent can still provide opportunities, it generally requires more negotiation and risk-sharing than licensing a granted patent.

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