After creating an invention or product and successfully completing the patent application process to obtain a registered patent, one of the most difficult parts of owning a patent is negotiating licenses and assignments. Licensing and/or assigning your patent is one of the best ways to monetize your patent, especially if you are not manufacturing or selling the patented invention yourself. Intellectual property negotiations can become complicated, and the more complex the agreement sought or the patent involved, the more complex the negotiation can be. A negotiation is a discussion between two parties trying to get the most out of an agreement possible and requires planning and tact.
What’s the difference between a patent license and an assignment?
When a party is granted a license, it can use a patent owned by another. An assignment is the transfer of the intellectual property to another company or person. A license may allow a patent holder to charge the other person or company a fee for using the patent, but assignment does not, because the other person or company now owns the patent. I like to think of these in terms of a real estate, a license is like a rental lease on a house, where an assignment is equivalent to a purchase of the house.
Assignments can be sales or transfers of a patent and are intended to be permanent. Assignments should be recorded with the USPTO to put all others on notice of the current owner. Licenses, on the other hand, can be a temporary or permanent use of the patent as long as the patent holder is given consideration, and they do not need to be recorded with the USPTO.
Why negotiate patent licensing or assignments?
Patent licensing is one of the ways patent holders benefit financially from their patent, and the uses and benefits are long-lasting. You don’t want to simply take someone’s first offer or let them name their price, and it may not be beneficial to you to put a take-it-or-leave-it offer on the table. Negotiating shows that you’re willing to create a unique solution that’s right for the two of you. It’s not necessarily a compromise but a solution tailor-fit to the relationship. Patent licensing and assignments are all unique relationships, as patents are themselves a unique property.
Generally, parties willing to negotiate are parties that respect you and want to develop an ongoing relationship. It also shows that both sides are serious about the license or assignment, and that they value the patent and the invention it claims.
Most importantly, the thing being exchanged is intellectual property. Its intangible nature requires more discussion. For example, while negotiating for a car may end once the buyer gets the keys, patent licensing and assignment is more complex because what is being bargained for may be an idea and, particularly, the exclusivity of the idea.
Choosing an attorney to represent you in negotiations
It’s crucial to find the right attorney to negotiate on your behalf in patent licensing or assignment negotiations. Your attorney should understand patent law, patent and licensing issues, and how to leverage your assets so you get the most in return and forge a solid business relationship.
Negotiation is a science and an art, and someone who is also experienced in negotiation and mediation is likely to help you create the best possible agreement and forge a congenial business relationship. If you’d like to speak with our intellectual property law attorneys about your options and best paths forward, we invite you to contact our office at 888-666-0062 to schedule a consultation.
DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney.
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