June 15, 2020

What's next | IP licence agreements

Continuing on our 'What's next?' series, IP licence arrangements is the featured topic for this video and article:

Licensing Arrangements are a way to enable Intellectual Property to be better commercially exploited.

Traditionally the Licensor and Licensee will have different drivers for entering into an IP Licence arrangement:

  • A Licensor will often look at an IP Licence as a means of leveraging off a geographical advantage that the Licensee has in a territory; or as a way to address a lack of internal resource within its own business and/ or exploit another market where it does not have a presence or knowledge of local regulatory requirements; in this way the Licensor can utilise the expertise of the Licensee to complement its own expertise and IP assets.  
  • For the Licensee the lens will be a little different as they are not the owner of the IP. The Licensee may instead look at a IP Licence as a means to gain a cost or resource advantage by using the licensed IP to enhance and add value to its own resources and products; or it may prefer the ability to use the IP without the associated costs of researching and developing the IP; or to build on an established reputation in the market; in this way the Licensee can leverage off the work and investment of the Licensor to gain its own market advantage.  

This article discusses the standard assumptions made by both Licensor and Licensee under an existing IP Licence arrangement and considers how they might change in the new Covid environment.  

An IP Licence arrangement can provide distinct advantages to businesses who might otherwise face restrictions for any expansion of business interests outside of existing territories and physical locations. In a Covid environment where countries are in lockdown and borders are closed, the founding assumptions of an IP Licence may need to be reconsidered. Being able to accept that the original assumptions of an IP Licence will be challenged and then being flexible enough to allow for a realignment of the business relationship will be the key to moving forward in today’s ‘new normal’ business environment. An IP Licence can help ensure that the product is still available and positioned well in the market for the way in which that market behaves during these unprecedented times. To make sure that this happens it is important that the parties talk and reset the relationship as best they can.

If you have observations or interested in finding out more on this topic or the other areas we have covered in the series, please get in touch with Sonya or Simon.

Social media image credit: Agence Olloweb

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