NEW LIFE SCIENCE COMPANIES

Many emerging growth companies face patent licensing issues. In particular, new life science companies usually require the "in-licensing" of intellectual property that will establish the essence of their company. Patent licensing raises a host of critical legal and business issues that the company will need to address appropriately in order to ensure it has the right level of protections as it approaches the marketplace. This article highlights several key issues facing companies that want to obtain a license to practice under a patent. First, the company must determine if it will obtain an exclusive or non-exclusive license. A patent license is a waiver by the licensor of the right to exclude the licensee from practicing under the patent rights. Licensees would prefer to obtain an exclusive license if possible. In addition to the commercial disadvantages of a non-exclusive license, a non-exclusive licensee acquires no affirmative rights with respect to the enforcement of the licensed patents. Unless the non-exclusive license specifically provides some protections, the licensor has no duty to protect the non-exclusive licensee’s interests in the event of patent infringement, abandonment of the patent, or other licensee’s with better terms. The licensor may want to preserve the ability to license to several licensees in order to ensure that the patent rights are fully utilized, instead of tying the patent rights to just one entity. One of the biggest fears of a licensor is that the licensee will not fully commercialize the intellectual property and the licensor is left with nothing to show for its patent efforts. As discussed below, the licensee can address these fears by including certain provisions, such as minimum royalties or milestones that the licensee must meet, or by limiting the license to a particular field of use.

Now days patent licensing issues are very popular.Many companies are getting sued or companies are suing other companies.As mentioned above New Life Science Companies is debating whether to go with an exclusive license or a non-exclusive. I believe an exclusive license is the best choice,you get more protection vs a non exclusive license that aquires no affirmative rights with the respect to the enforcement of the license patents.

By: Stephanie Carcamo