Do you wonder what licensing a patent is? It simply means that you, as the patent owner, grants permission to an individual or organization to make, use or sell your patented invention. Licensing takes place according to agreed terms and conditions, for a specific purpose, in a defined territory, and for an agreed period of time. In other words, licensing the patent is a mutual agreement between an individual or companies or a company which you choose to make, use and sell your product in the market. As you are the patent holder, your ownership for the invention is retained and you enjoy royalty payment on the product. It is always best and recommended to license your patent to a company that is one of the top players in capturing market interest already in the subject of your invention. In that way, your patent would fit the product gap.
Why would you want to license your patent? You may not have the necessary manufacturing facilities, for example, and therefore you now have the option to allow others to make and sell your patented invention in return for “royalty” payments. Another possible reason is you may wish to concentrate on one geographic market and therefore you may choose to grant a license to another individual or organization that has interests in other geographical markets. Entering into a licensing agreement can help build a mutually-beneficial business relationship. Licensing also is a very convenient and easy method to convert your idea into reality without having to invest any resources but ensuring a lifetime of royalty. In this case, the lifetime refers to the patent and not the patent owner or inventor. Also, you would have no manufacturing or distribution costs if the product is licensed to an individual or company. This would leave you free of liability but you could still enjoy royalties. If you license your patent to a well-known company, your product is more likely to enter the market in a faster and shorter period of time.
An attorney can help you get a simplified patent licensing strategy and write a license agreement with the terms and conditions that you desire.