What is patent/licensing of intellectual property?
The law of intellectual property typically encompasses the areas of copyright, patent, and trademark law. It is designed to encourage the development of art, science, and information by granting certain property rights to all artists, which include inventors in both the arts and the sciences. These rights allow artists to protect themselves from infringement, or the unauthorized use and misuse of their creations.|5|
Patents, trademarks, copyrights and other forms of intellectual property (IP) are crucial to companies that employ technology to compete in the marketplace. |3|
Legally, the intellectual-property system covers four areas: copyrights (used to protect artistic, musical or literary works); trademarks (for things like brands); patents (for inventions); and an ill-defined category of “trade secrets”, for practices that are kept confidential. The system provides legal protection against counterfeiters and copiers and is vital to many fields, such as biotechnology and nanotechnology. And it matters not only to companies: universities, too, have recently become big patent holders and licensers. |1|
Patent
Patents confer a “negative right” to exclude others from using the same technique; yet information technology and telecommunications rely on “network effects”, meaning that as more people use a system, it becomes that much more useful. To make the most of such network effects, interoperability between different technologies is essential. This can be achieved either by a single standard set by a dominant firm (which tends to generate resistance from customers and competitors), or by using a mixture of different technologies, with the patent system providing legal protection for inventions.
The standard justification for the patent system is that it provides an incentive for innovation, allowing the inventor to reap rewards by protecting the work from imitators who would otherwise hitch a free ride on the investment. But that is a simplification. The initial intention was in fact to make inventions available to the public as well.
In principle, patents open up innovations in two ways. First, they confer only temporary rights; once patents expire or are abandoned, the intellectual property they are designed to protect passes into the public domain. Second, they require the details of the invention to be disclosed so they can be replicated. This permits follow-on innovation, which is essential for industrial progress. |1|
Licencing
An intellectual property license is permission for an entity to take some action with respect to software, movies, inventions, or whatever it is being licensed. It is important to make sure that the terms of a license are as broad or narrow as is necessary to achieve your goal. The type of action — to make, to use, to sell, to modify, to copy, etc. — and the degree of permission — for how long, how exclusive, etc. — are up to the parties to negotiate as part of the license agreement. |4|
A licensing agreement is a partnership between an intellectual property rights owner (licensor) and another who is authorized to use such rights (licensee) in exchange for an agreed payment (fee or royalty). A variety of such licensing agreements are available, which may be broadly categorized as follows:
• Technology License Agreement
• Trademark Licensing and Franchising Agreement
• Copyright License Agreement
In practice, all or some of these agreements often form part of one single contract since in transfers of this nature many rights are involved and not simply one type of intellectual property right. You may also come across licensing agreements in other circumstances, such as, during a merger or acquisition, or in the course of negotiating a joint venture.
Cross-licensing
Customers are demanding “interoperability” and common standards rather than proprietary systems, which means different firms' technologies must work together smoothly. This often requires pooling patents or cross-licensing agreements. Companies cannot simply turn their back on what is happening in intellectual property. Even if they refuse to play the game, they may be unwittingly infringing someone else's patents because there are so many more of them around. Unless firms have patents of their own to assert so they can reach a cross-licensing agreement (often with money changing hands too), they will be in trouble. Thus many companies are acquiring large numbers of patents for purely defensive reasons, for use only to keep others' patent threats at bay. |2|
Refrences
|1| http://economist.com/surveys/displaystory.cfm?story_id=5014990
|2| http://www.wipo.int/sme/en/ip_business/licensing/licensing.htm
|3| http://www.ipdox.com/
|4| http://www.darwinmag.com/read/040104/legal.html
|5| http://www.answers.com/topic/intellectual-property?method=22