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Patent Licensing Basics

Dr. Kalyan C. KankanalaBananaIP

kalyan@bananaip.com91-80-26860424/34www.bananaip.com

Blog: www.bananaip.com/sinapse-blog

Transfer of Patents

• Assignment

• License

Licensing Opportunities?

• Patent Portfolio Analysis

• Grouping

• Validation and Strength Analysis

• Valuation

• Potential Licensees

• Negotiation

• Execution

License

• Authorization or Permission

• Exclusive Rights

• Territory

• Writing

• Signature

• Register

Types of Licenses

• Exclusive

• Non-exclusive

• Sole

Important clauses

• Recitals

• Definitions

• Grant

• Royalties

• Term and Termination

Recitals

• Parties – Licensor/Licensee

• Addresses

• Dates

• Background of the transaction

Definitions

• Interpretation clause• Consistently used words

– Specific/certain/lucid

• Attribute specific meaning• Apply to entire agreement

Examples• Licensor shall mean ABC company having a place of business in Bangalore

and shall include its subsidiaries, assignees and legal representatives.

• Licensee shall mean Kalyan, resident of xyz, Bangalore and shall include his successors, assignees, administrators, executors and other legal representatives.

• Licensed Patent shall mean patents granted in USA under patent numbers xxx, yyy and patent applications pending before Indian Patent Office having filing numbers xxx, and YYY.

Grant Clause• Most important• Defines scope of agreement• States

– Parties– Type– Subject– Rights– Territory– Term

Example• Licensor grants to Licensee a nonexclusive license to use the Licensed Patent within the territory of

India from 1st January, 2005 to 1st January, 2006.• This clause specifies • Who grants to whom -Licensor to Licensee.• Type of license - Nonexclusive License• Rights – Use Licensed Patent• Territory - India• Dates - January, 2005 to 1st January, 2006

Other Grant Provisions

• Field of Use

• Sub-license

• Grant back

Term and Termination

• Term• Events

– Material Breach - Nonpayment of royalty, etc.– Bankruptcy– Insolvency– Act of god

• Rights after termination• Confidentiality

Royalty Clause• Type of Royalty

– Lump sum royalty– Fixed Royalty– Running royalty

• Combination.• Patent prosecution• Mode and Date of payment• Accounting and Record keeping• Non payment consequences.

Milestones

• Identification of a lead candidate for development

• Filing of IND or equivalent • Completion of Phase I clinical trials • Completion of Phase II clinical trials • Completion of Phase III clinical trials • Filing of NDA or equivalent • Approval of NDA or equivalent

Example – Pfizer-AVANT

• Exclusive worldwide licence• to a therapeutic cancer vaccine candidate • Lumpsum - 40 million dollars• Investment - 10 million dollars in equity• Milestone payments - Upto 390 million dollars• Running royalty - double digits• Fund Research and Development

Other Clauses

• Indemnity

• Warranty

• Liability

NRDC V. ABS

• Patent License

• Not registered

• Expiry of patent term

• License invalid

Kinds

• License• Cross License• DuPont and Bayer - Herbicide and

Multi-insect control products• Patent Pool• Essential Patent Pool for AIDS• Open Source Projects• Human genome project

Negotiation

• Background research

• Awareness of Patent Law

• Technology understanding

• Context and Culture

• Bottom lines and Flexibilities

Examples

• CSIR Lab and Research Based Company

• Diabetes research - License Terms

• Indian Company and Foreign Pharma Major

• Stem Cell patents - License Terms

Tuesday, April 11, 2023

IP Resources

•

• www.sinapseblog.com

•

• www.patentpill.com

Indian Patent law and Practice

Patents play a very vital role in providing business and competitive advantage to knowledge driven companies. In order to maximize business benefits from inventive activities, companies must be aware of the dynamics of patent law and activities of competitors. Swift response to changes in law and patent behavior of other companies is necessary to deal with cut throat competition. The rapid progress of patent activity in India requires every organization to be alert and watchful in order to survive and succeed in the market place.

For more information on the book please visit: www.indianpatentlaw.com

Tuesday, April 11, 2023

Any Questions, Comments or

Observations?

For further information, please

visit –www.bananaip.com/sinapse-blog