Patent, Trademark, And Intellectual Property Representation For Businesses And Corporations

Does patent licensing increase the risk of infringement?

On Behalf of | May 31, 2024 | Intellectual Property

Successfully prosecuting a patent theoretically gives a company sole control over a concept or new product. The patented idea, item or process becomes the protected intellectual property of the patent holder.

Securing a patent can help a company protect what it has invested in acquiring intellectual property or in research and development to reach a breakthrough that gives a competitive advantage. Many organizations with patents jealously defend them and try to keep patented information as private as possible until the patent eventually expires.

Other companies go the opposite route. They make a patented concept available to competitors by negotiating licensing agreements. Some executives worry about patent licensing because they believe that giving competitors access to the company’s intellectual property could lead to infringement in the future. Does a licensing agreement increase the risk of infringement?

Licensing can protect against infringement

Many of the most successful companies in the most competitive industries negotiate licensing agreements as a way to protect their intellectual property and keep an eye on potential sources of misconduct. Particularly when a patented idea is necessary for companies to offer what consumers want or compete on the current market, they may do whatever is necessary to remain competitive.

There are countless cases of organizations attempting to reverse engineer the impressive advances made by competitors. The information included in the patent and the technical knowledge of those working at the company could allow outside organizations to duplicate or expand on patented ideas. Other times, companies may stoop to acts of corporate espionage to access a competitor’s trade secrets.

Licensing helps ensure that companies with an interest in another organization’s intellectual property pay for access to those ideas. The patent holder has an idea of what other organizations might eventually misuse the company’s patent. For example, some organizations negotiate a short-term licensing agreement and then continue using the information they accessed through that agreement after it expires and they cease paying a licensing fee.

Patent holders who are aware of what other businesses have an interest in using their patents can more readily identify cases of infringement and take necessary legal steps to respond to patent infringement.

Businesses attempting to monetize intellectual property and protect existing patents often need specialized support. Having the right guidance when negotiating a patent licensing agreement could increase the likelihood of a company protecting its intellectual property and overall financial interests.