| +61 03 8060 3504

Licensing: What is it and how does it work?

 If you are the owner of a patent product but don’t have the time or resources to bring it to market, a possible option is to licence the rights to your intellectual property to a third party.  This arrangement is usually done under a licensing agreement whereby the patent owner (the licensor) gives a third party (the licensee) the rights to use, manufacture and/or sell the patented product subject to specific terms, conditions and fees.

The licensing agreement outlines the type of licence, (sole licence, non-exclusive or exclusive licence); duration of the agreement; the territory for which the rights are given; agreed fees or royalties; the payment schedule; audit process; renewal options; performance criteria, cancellation clauses and any other relevant conditions.


Royalties can be based on sales; the use of the patented process, or as a lump sum or signing fee.  It is negotiable.

Patent Assignment – is when the patent owner (the licensor) allows a third party (the licensee) to purchase all the rights to the patent in exchange for an agreed sum of money. Once the patent has been assigned, the original patent owner relinquishes all rights to the patent.

Need help with licensing or negotiations?  Contact INNOVIC on (03) 8060 3504.  INNOVIC operates nation-wide and can help with grants, IP, market research, prototyping, commercialisation and more.

Get your FREE Startup Tool Kit

Register your details below and download your free Startup Tool Kit.