Before licensing a patent

Run this before the commercial terms are agreed, not after.

HighAfter grantFounderEnterpriseUniversity

Most licence disputes are not about the rate. They are about who may do what, where, and what happens when something changes.

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Have you valued the patent before negotiating the rate?Value comes from claim breadth, defensibility and whether anyone needs to practise the claims to compete.
If yes: If a licensee could design around it in a month, the rate is not the issue.
Is the field of use defined precisely?Broad field definitions give away markets you have not thought about.
If yes: Define by application, not by industry label.
Is the territory defined, and does it match where the patent is in force?You cannot license rights you do not hold in a country.
If yes: List the patents by country against the licensed territory.
Does the agreement say who may sue an infringer?Without it, an exclusive licensee may find they cannot act and the patentee has no incentive to.
If yes: Draft the enforcement clause before the royalty clause: who sues, who pays, who controls settlement, who recovers.
Who owns improvements made by the licensee?Silence here creates the next dispute, usually about the most valuable technology.
If yes: Say explicitly who owns them and whether there is a licence back.
What happens to royalties if the patent is revoked or narrowed?Validity challenges are common, and the answer should not be improvised.
If yes: Address revocation, narrowing and lapse separately.
Have you told the licensee about their working statement obligation?Licensees have obligations under section 146 too.
If yes: Put it in the agreement and remind them at each three-year block.
Will the licence be recorded?Recordal puts the licensee position on the register.
If yes: Record it, and say in the agreement who is responsible for doing so.

An exclusive licence with no enforcement mechanism is a promise nobody has to keep.

Sources & further reading

The Patents Act, 1970 (consolidated to 1 August 2024) — Official IP India text

MediumCriticality

The licence that could not be enforced

Most licence disputes are not about royalty rates. They are about who may do what, where, and what happens when something changes - and those are the clauses that ge…

After grantIntermediate

In simple words

Licensing

An agreement by which the patentee permits another person to do something that would otherwise infringe, on agreed terms - exclusive, sole or non-exclusive, and usua…

Intermediate

MediumScenario

The licence with no enforcement clause

What can the licensee do?

After grantBeginner

Not sure whether this applies to your invention?

The honest answer usually needs someone to look at your actual disclosure, your timeline and the prior art. That is a conversation, not an article.

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Educational guidance, not legal advice. This material is published by Ragulika IP for general education and information. It is not legal advice, it does not create a professional-client relationship, and it is not a substitute for advice on your own facts. Patentability, infringement, prosecution strategy and every other IP outcome turn on the specific facts and on the law and Patent Office practice as they stand at the time you act. Please take professional advice before making a decision, and read the underlying provision or judgment before relying on any point stated here.

Last reviewed by Ragulika IP on 2026-08-23. Indian patent law and Patent Office practice change; check the position before you rely on it.