What is patent licensing?

Patent licensing is an agreement between the original patent holder and another party in which the patent holder gives permission for the use of the patent by the other party. In Washington, patent licensing is regulated by the United States Patent and Trademark Office (USPTO). Before a license can be granted, a patent holder must formally submit an application to the USPTO. The patent holder can decide what rights or conditions apply to the license and must also agree to receive a predetermined fee for the license. Commonly, the licensee may be allowed to use the patent for a specific period of time, within a certain geographical region, or for specific types of products or services. The licensee may also be required to pay an ongoing fee or royalty to the patent holder. Patent licensing is an effective way to expand a patent’s value without having to produce or market the products or services related to the patent. It also allows the patent holder to have some control over how that patent is used and to make money from the patent beyond what it would earn from its own production.

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