WIPO and ITC Publish Guide on Negotiating Technology Licensing Agreements

Geneva, February 7, 2005
Press Updates UPD/2005/237

A new practical guide on how to negotiate technology licensing agreements has been published by the World Intellectual Property Organization (WIPO) and the International Trade Centre (ITC). The manual entitled “Exchanging Value – Negotiating Technology Licensing Agreements” provides an introduction to some of the basic issues that arise in intellectual property licensing negotiations , particularly patent - protected technology and offers useful insights into how they may best be handled. In a highly competitive and dynamic marketplace, technology licensing is a useful option for companies seeking to maintain their competitive advantage and a healthy balance sheet.

The publication offers a practical introduction to negotiating licensing agreements and is designed to address the needs and concerns of non-specialists. The Guide focuses on the identification, acquisition and transfer, through licensing agreements, of intellectual property, in particular patent-protected technologies. It provides guidance on negotiating techniques for licensing contracts and explains in clear, concise terms a number of basic rules, common issues and legal concerns associated with the negotiating process.

More and more companies rely upon new and improved technology to obtain a competitive advantage in today's highly competitive international marketplace. Increasingly, a number of patents are responsible for a technology and a number of technologies for a product, for example, a car or a camera. This technology can be acquired either through research and development undertaken by the company itself, in cooperation with others, or by acquiring technology developed by others which may be on offer in the market.

Under a licensing agreement, the licensor continues to own the technology and gives a defined right to the licensee for the use of that technology. Thus a company may, “license in” technology (acquire rights to technology developed by another) and adapt it to its needs and avoid R&D costs. Alternatively, a company that has come up with a new or better product or process might consider “licensing out” its technology (grant to another the right to use technology owned by the licensor) to those who are seeking such a solution and earn an additional source of income. A successful licensing agreement can be profitable for both the licensor and the licensee. In this way, licensing is an important means of promoting more effective transfer of technology, fostering entrepreneurship and the development of micro-enterprises and small and medium-sized enterprises which in turn helps to promote wealth creation and overall national economic development.

• "Exchanging Value - Negotiating Technology Licensing Agreements" .

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