Granting a licence for your patented product or service

You own a patent, but you want a third party to market the product or service. Or you want to make use of know-how that is protected by another company’s patent, to combine with yours in one product or service. Granting a patent licence may be the way to go.

You can grant a licence for everything covered by your patent, per country or per market or application area. The licensee usually pays the licensor a compensation (fixed or variable) for this privilege. It is also possible for 2 patent owners to grant each other a licence. This is an option often chosen when 2 inventions are used in the same product or service. It allows both patent owners to market the product or service freely. It can also give your company access to new knowledge. Such an exchange of licences is called cross-licensing. Be sure to draw up a licence agreement, in which you specifiy what is allowed and what is not. The Netherlands Enterprise Agency can give you information about drawing up a licence agreement. Read their article (in Dutch).

Types of licences

There are many different types of licence: non-exclusive, exclusive, open. Read the Netherlands Patent Office article on types of licence (in Dutch).

Advantages of granting a licence

A licence can increase your chances of making a profit from your invention. Other possible advantages are:

the licensor remains in charge of the invention (if you would sell your patent, you would no longer have any say)
the licensor can combine their own production with other licences, for instance for other countries or markets
non-exclusive licences can be granted to multiple parties. That way, you as licensor are not dependent upon one party to market your invention – and make it profitable
open licences make for a good market – supply balance
granting an exclusive licence keeps the market transparent

Disadvantages of granting a licence

Licences also limit the licensor. For instance:

the reputation of a product marketed by the licensor becomes dependent on the quality of other suppliers
the interests of licensee and licensor for maintaining the patent may differ
the licensor may become too dependent on the success of the licencees
the licencee of an exclusive agreement can keep a product or service off the market
the interests of licensee and licensor often change after a couple of years. This may lead to discussions and disputes

Find a licensing partner

If you want to grant licences for your patent(s), go public. It will make it easier for you to convince a potential licensee, and allow you to keep a grip on the market. If you do not make your intentions known, the potential licensee may hesitate to approach you. The potential licensee may hesitate to ask for a licence, because the patent owner might say no and decide to market the product themselves. And that would mean competition, instead of collaboration. If the potential licensee has grave doubts about your willingness to collaborate, they may not approach you at all, but look for or develop an alternative themselves. This would make your chances of making a profit from your invention slimmer, as it would add competition. You can offer your patent for licensing through the Enterprise Europe Network (EEN), a networking and matchmaking organisation active in over 60 countries. You can also look for licensing parties yourself, for instance by searching patent databases, approaching a knowledge broker, or using the services of a mediation website.

Finding a licensing party through EEN

The Enterprise Europe Network manages a digital patent database, where its advisors can search for candidate licensors and licensees in over 60 countries. This service is free of charge. In the Netherlands, you can register your willingness to license your patent at different stages in the patenting process:

in your patent application with the Netherlands Patent Office, you can state your intention to license your patent. If the patent is granted, it will be automatically registered in the EEN digital patent database.
If you have already applied for a patent, but it has not yet been granted, you can fill out a ‘Declaration of willingness to license (Verklaring Licentiebereidheid in Dutch)’ at mijn.rvo.nl (in Dutch), using your application number.
Once your patent has been granted, you can fill out a ‘Declaration of willingness to license (Verklaring Licentiebereidheid in Dutch)’ at mijn.rvo.nl (in Dutch), using your patent number.

Finding a licensing party through mediation websites

There are several online patent databases that allow you to indicate your willingness to license your patent. Patent owners and licensees can connect at these online ‘market places’ or trade fairs.