JimIvey
Moderator Senior Member
    
Posts: 2584
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Re: You license, get money but don't get patent!
« Reply #1 on: Dec 1st, 2006, 12:31pm » |
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on Nov 24th, 2006, 5:58pm, Tony Kondaks wrote:Assume I file a provisional patent application. Assume I go out into the marketplace and actually sell some company a license to the invention(s) contained in the provisional application. Fast forward several years and assume that the Patent office REJECTS my utility patent and I cannot get a patent. Assume that between the time of my filing of the provisional and the final rejection, I have received $1 million in licensing fees. Do I have to give the $1 million back to the licensee? |
| It depends. What does the license say? on Nov 24th, 2006, 5:58pm, Tony Kondaks wrote: Because the license says so. There would be a number of theories as to why such a license would be valuable. It could set a favorable rate of royalties during a period when the viability of issued patent rights are in doubt -- sort of like a futures contract. It could be an exclusive license and the licensee could be paying for your promise not to license the same technology to anyone else (presumably protected as a trade secret as long as possible). on Nov 24th, 2006, 5:58pm, Tony Kondaks wrote:Would it be because I would have written something into the license agreement that would have protected me in the event the patent wasn't granted? |
| Yes. There may be some caselaw that explains how that works in the absense of any pertinent language in the license. I'm not familiar with that, though. on Nov 24th, 2006, 5:58pm, Tony Kondaks wrote:If so, what exactly should be included in the agreement? |
| Sorry, don't have specific language to share. Something like "The obligation to pay royalties under Section ?? expires in the event that no claim covering the technology described [elsewhere] is either pending or issued. Upon such an event, LICENSOR has no obligation to return any royalties paid prior by LICENSEE to such an event." Regards.
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