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Dec 4, 2017 | By Troy Carter

Patent license agreements explained (with example)

Information on the little-known instrument that savvy small businesses use to develop new products invented in federal laboratories

News Article Image of Patent license agreements explained (with example)

What is a Patent License Agreement? Your ticket to new product development.

Basic and applied research performed at Army, Air Force, and Navy laboratories often produces novel inventions that have commercial value.

Once protected, the rights to those technologies are available for licensing to businesses for new product development and sales.

The customers for these new products can be military or civilian as many of the inventions have dual uses. TechLink assists the Department of Defense by actively marketing its available patented technologies to prospective companies and facilitating license agreements.

By signing a patent license from a defense laboratory, a business can manufacture or use the invention in their products with the right to bar others without a license from doing the same.

A business who signs a patent license often also receives additional supporting materials, e.g., software code, drawings, use cases, or prototypes.

Each patent license agreement is individually negotiated between representatives from the respective defense laboratories and the prospective licensee (business).

For example, Truston Technologies, a small business based in Maryland, has sold over $85 million of port security barriers to public and private customers worldwide since licensing the barrier technology from the Navy in 2008.

Patent license agreements with government laboratories are authorized and encouraged by federal law. And accessing DoD inventions is made as easy as possible by TechLink. License agreements are intended to be equitable and acceptable to both the laboratory and licensee, and TechLink’s experienced staff of licensing professionals will work with applicants to help achieve their business goals.

A license to DoD-owned patent rights will be subject to terms and conditions similar to those set forth in the sample agreements in the links below. Some language may be modified to address unique aspects of each situation.

Financial terms, in particular, will be based on the individual technology being licensed, the commercialization plan of the licensee, and the industry field the licensee operates in. Generally, financial terms used in patent license agreements with defense labs are favorable to small businesses.

Exclusive Patent License Agreement

An exclusive patent license agreement affords a single licensee (business) the rights to manufacture and sell a DoD invention for any commercial application worldwide.

Partially-exclusive Patent License Agreement

A partially-exclusive license allows multiple companies to obtain rights to manufacture and sell a DoD invention but only in certain, specified commercial applications or in certain, defined geographic locations.

Non-exclusive Patent License Agreement

Non-exclusive licenses can allow any number of companies to obtain the same DoD technology and use it in many different products or commercial applications and make it for sale in many different geographic locations.

Sample Patent License Agreement

TechLink is working with the DoD labs to develop an accelerated process for licensing certain technologies. These “express” licenses have pre-negotiated terms and conditions that are available to licensees before they complete the application process. To view technologies available through express licensing click here.

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