An introduction for tech licensing for entrepreneurs

tech licensing for entrepreneurs

Entrepreneurs and SMEs account for 99.9% of the business population, which equates to around 6 million businesses in the UK. And this trend is set to continue to rise, as more and more people are turning their backs on large corporations and going it alone. However, when starting a business, there are certain things you should know, and one of them is tech licensing for entrepreneurs. 

What is tech licensing?

Broadly speaking, technology licensing is the exchange of intellectual property (IP) between two entities. The first entity gives another the permission (or license) to use the first entity’s IP. It works like a rental agreement, in that just like a building owner gives someone permission to occupy an apartment for a duration of time in exchange for payment; in a technology license agreement, an IP owner gives someone permission to use certain IP for a specified period of time in exchange for payment – known as royalties or licence fees. 

In a technology license agreement, ownership of the licensed IP is not transferred and instead only certain specified permissions regarding the IP are granted. 

What are the types of license agreements?

License agreements vary depending upon the IP involved and the industry sector. 

Exclusive v Nonexclusive

In an exclusive license agreement, the technology is licensed to only one entity and cannot be licensed to others by the IP owner. Nonexclusive license agreements however, mean the licence holder is permitted to license the technology to other parties. 

Patent license agreement

The most common type of technology license agreement, patent license agreements mean the licensor is agreeing to not sue the licensee for patent infringement of the patents included in the agreement.

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Trade secret and know-how agreement

This is where the licensor is permitting the licensee to practise and commercialize trade secrets owned by the licensor. 

Software license agreement

A software licence agreement is another common type of agreement. Typically, a hybrid of a copywrite, know-how, and trade secret license, a software license agreement gives the licensee the permission to use the software for specified purposes

What is meant by competition law?

Competition law aims to promote health competition and bans anti-competitive agreements between firms and makes it illegal for businesses to abuse a dominant market position. Because intellectual property rights give their proprietor a monopoly in a particular field, and also because patents give protection within national boundaries, there is often tension between the exercise of patent rights and competition law. Many of the terms that parties would like to include in their licences for their own commercial advantage are quite likely to fall within the Chapter I/ Article 8 (1) prohibition. 

If you require further assistance regarding competition law and tech licensing for entrepreneurs, it’s important to speak to a specialist law firm like Withers who can help provide you with the information you require as an entrepreneur. SMB is a protocol, just like the http protocol we use to browse the web, a set of rules that defines how data access is to take place.


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