Oneself; Non-Exclusive or Exclusive Licensing

[listenup77]

California.
I read this article and it was interesting, can someone give me their legal or personal opinion on the accuracy of this opinion. Especially the part where he recommends Non-Exclusive licensing as a legal strategy against infringement (exclude the tax comment).

Part of Article:

There are four basic marketing strategies.
1) Manufacture and market the product exclusively yourself.
2) Grant an exclusive license to one party.
3) Sell the patent outright.
4) Grant non-exclusive licenses to any party.


If your patent gives you a lock on a large market number 1 or 2 will encourage other companies to infringe and or attempt to invalidate your patent. It may be necessary to grant an exclusive license if a significant startup investment is required to bring the idea to market. Outright sale removes most the burden of defending the patent but could result in dramatically less income for you if the patent is very successful. You can still be charged with inequitable conduct and dragged into litigation even after you have sold the patent.

Non-exclusive licenses remove much of the market pressure to get around the patent and ensures that you are compensated proportionate to the success of the patent's idea. In most cases a non-exclusive license is most profitable for the inventor and therefore the best method of marketing your idea. One other consideration is that income from an exclusive license that is properly drafted may qualify as long term capital gain resulting in lower taxes.

For those wanting to read the entire article, it's a good one for inventors, it can be found here:
http://www.rjriley.com/acq&def.html

Thanks in advance.

Miguel

 

[divgradcurl]

California.
I read this article and it was interesting, can someone give me their legal or personal opinion on the accuracy of this opinion. Especially the part where he recommends Non-Exclusive licensing as a legal strategy against infringement (exclude the tax comment).

Part of Article:

There are four basic marketing strategies.
1) Manufacture and market the product exclusively yourself.
2) Grant an exclusive license to one party.
3) Sell the patent outright.
4) Grant non-exclusive licenses to any party.


If your patent gives you a lock on a large market number 1 or 2 will encourage other companies to infringe and or attempt to invalidate your patent. It may be necessary to grant an exclusive license if a significant startup investment is required to bring the idea to market. Outright sale removes most the burden of defending the patent but could result in dramatically less income for you if the patent is very successful. You can still be charged with inequitable conduct and dragged into litigation even after you have sold the patent.

Non-exclusive licenses remove much of the market pressure to get around the patent and ensures that you are compensated proportionate to the success of the patent's idea. In most cases a non-exclusive license is most profitable for the inventor and therefore the best method of marketing your idea. One other consideration is that income from an exclusive license that is properly drafted may qualify as long term capital gain resulting in lower taxes.

For those wanting to read the entire article, it's a good one for inventors, it can be found here:
http://www.rjriley.com/acq&def.html

Thanks in advance.

Miguel

I didn't read the article, maybe I'll take a look later -- but the main point I noticed was that the type of license you grant -- or a sale of the patent outright -- will likely be dictated by the person or company you are dealing with for manufacturing -- you may not get your own choice. Beyond that, when it comes time for licensing, you will probably want to work with you own lawyer to make sure you get the best possible deal for yourself.