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Licensing
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1. What is licensing?
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Licensing is one method of bringing a product to market. Generally, a product is licensed to a manufacturer that produces the product under license from the inventor in exchange for royalties.
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2. What is the major benefit of licensing?
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Limited capital requirements with the benefit of having a manufacturer produce and distribute a product with their expertise, distribution network, and financial backing.
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3. Do I need a patent to license my product?
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Yes. It would be next to impossible to license a product without some form of intellectual property protection such as a patent or trademark.
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4. How long is a licensing agreement valid?
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Licensing agreements range widely in term although most run for three to five years.
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5. How much would it cost to license my product?
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The cost to license can vary drastically based on the complexity of the project.
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6. Can I expect to get any up front money for a license?
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Yes. In most cases, when a product is licensed the inventor can expect to receive what is called a technology transfer fee. Usually in the amount of the Research and Development (R and D) costs associated with developing the product.
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7. How much would my royalty be?
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Most invention royalties are based on between three to ten percent of the wholesale price of the product. As an example, if a licensed manufacturer produced your product for five dollars and sold it to a distributor or a wholesaler for ten dollars you would be entitled from anywhere to thirty cents to one dollar.
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8. Can I sell my project outright for a lump sum cash payment?
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Yes, you can, but this is rare event in the field of licensing as most manufacturers would prefer to pay a small long-term royalty per unit rather than a large lump sum payment on a project whose success has not yet been proven in fact.
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Source: The Patent Guys Website
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http://www.patentguys.com
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TYPES of LICENSING
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A license is a grant of permission to allow another to make use of intellectual property rights. The intellectual property right may be for a patent, trademark, trade secret, or copyright. The license may even be for technical or business "know-how". A license differs from an assignment of intellectual property rights. An assignment conveys title of the intellectual property. In a license, title of the intellectual property usually stays with the owner (called the "licensor"), rather than being conveyed to the license holder (called the "licensee"). Licenses may be exclusive or nonexclusive.
A nonexclusive license means that the intellectual property rights conveyed may be granted to more than one licensee.
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