Licensing
A license is another word for a contract. A license is
similar to a patent, except rather than being granted by a government, a
license is granted by an individual. An inventor, having created or
discovered a brilliant innovation, may not want to spend the hundreds of
thousands of dollars needed to properly start and operate a business for
their invention. An alternative for inventors is licensing their
invention, allowing another company to manufacture and/or sell their
product.
A license itself is a written agreement that authorizes another company to
use or sell an individuals invention. This license includes the key terms
and conditions such as royalties, insurance, time frame and special
conditions such as if the company goes bankrupt. It is not necessary to
have a patent with a license. A good strategy for inventors is to license
their products while waiting to receive patents (also known as patent
pending) to maximize their profits as quickly as possible. Licensing is
related to technology transfer as it deals directly with commercialization of innovations.
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