A license agreement is a contract between RF and a third party in which RF's rights to a technology are licensed (without relinquishing ownership) for financial and other benefits. A license agreement is used with both a new start-up business or with an established company. An option agreement is sometimes used to enable a third party to evaluate the technology for a limited time before licensing. The license may be exclusive or non-exclusive and may limit the allowable field of use.
Marketing of an invention may begin anytime after a disclosure is received by IPP. A marketing effort may start after a licensing staff makes the decision of patenting an invention. Inventor’s suggestions of companies to be approached are extremely valuable; likewise, any companies approaching inventor(s) for scientific discussions are considered target licensees. If the company shows strong interest, the parties may exchange License Term Sheet. Negotiations of the terms require a great deal of flexibility and creativity by both parties and can last several months before a mutually satisfactory agreement can be reached. Throughout the licensing process, it is important for all parties involved to manage expectation of outcome from the license transaction as financial considerations very widely depending on the technology as well as the licensee.
The inventor's involvement in the licensing process is very important. It is often the inventor's knowledge, contacts, sustained effort, and ongoing interactions with his/her technical counterparts in the licensing company that closes deals and turns invention into product. An inventor may be asked to disclose any other relationships he/she may have with external third parties at the time a license is executed in order to avoid any potential conflict of interests. Licensing is a team effort involving both IPP and the inventor and a great deal of trust.
It is often necessary to re-evaluate a licensing relationship to adapt to changed circumstances, or to take into account new situations. Either party can request an amendment to the Agreement at any time during its life.
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