One Example of When Taking a License Makes Sense

Licensing technology from other sources makes sense in several situations, even when the licensee does not practice the technology.

Remember that patents are merely business tools, and they are useful when they give your business an advantage over a competitor. Taking a license, even when your company may not currently infringe, may be appropriate in some cases.

In one situation, having a license may give your company access to patent rights that you may actively use against a competitor. Such a license may give you an exclusive license or an option to convert to an exclusive license. In many cases, an exclusive license may enable someone to exercise the patent rights within a specific territory, such as a state or other designated area.

The exclusive license may enable you to send, cease, and desist letters and obtain injunctions against a competitor that may infringe the licensed patents. The license may also enable you to write sublicenses to competitors and obtain royalty payments for the use of the licensed patents. The sublicense may act as a tax, making the competitor less profitable and your company more profitable.

Such a license may be obtained whether or not your company infringes the technology. The license may be another weapon in your arsenal that may give you an advantage over a competitor. By exercising the patent rights against a competitor, you can bring the competitor to the bargaining table and obtain royalties against the competitor’s ongoing operations, for example.

The key here is to consider getting a license when you believe a competitor may use the technology.