Patent Licensee: Have a Track Record if You Want to Succeed

This post is adapted from my answer to a Quora question from a prospective patent licensee. Q. How do I propose a licensing agreement with a patent holder?

A. In my experience, the most important thing that a prospective patent licensee needs to bring to the table is a successful track record.

Assurance from Patent Licensee

The patent holder wants assurance that the licensee will sell lots of product. That way, the holder / licensor will receive lots of royalties.

The best source of that assurance is provable, past success of the patent licensee. If the patent licensee can show that it has sold other products pursuant to licenses granted by other similarly-situated licensors, this licensor will be persuaded.

Lack of Assurance

If not, then the prospective patent licensee has an uphill battle.

In that case, the best result likely would be achieved by retaining an industry expert to provide advice. If the business case can be made, that expert can represent the patent licensee in approaching the patent holder.

It is important to realize, however, that retaining such an expert would require a significant investment of time and money.

In summary, a patent licensee with prior licensing success has the best opportunity to replicate that success in the future.

Related post: Patent Licensing for Licensors: Know Your Industry

Dana H. Shultz, Attorney at Law  +1 510 547-0545  dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.