IP Intelligence › Patent Criticalities › The licence that could not be enforced
Patent criticality
The licence that could not be enforced
What goes wrong in patent licence agreements?
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 get drafted last, in a hurry.
The clauses that decide the outcome
Scope. Field of use, territory, and whether the licence covers making, using, selling and importing. A licence for industrial use in India does not permit consumer sales or export unless it says so.
Enforcement. Who may sue an infringer, who pays, and who controls settlement. Without this, an exclusive licensee may find they cannot act and the patentee has no incentive to.
Improvements. Who owns improvements made by the licensee, and does the patentee get a licence back. Silence here creates the next dispute.
Validity. What happens to royalties if the patent is revoked or narrowed, and whether the licensee may challenge validity at all.
Recordal and term. Whether the licence is recorded, and what happens on expiry, lapse or assignment of the patent.
The commercial failure that precedes the legal one
Licensing a patent that the licensee could design around, or one whose claims cover only the patentee's own product, produces a deal that quietly stops mattering. Value the patent before negotiating the rate.
Sections 68, 69 and 70 of the Patents Act 1970; licences to be in writing and recorded.
Draft the enforcement clause before the royalty clause. It is the one that decides whether the licence is worth anything.
Using a template licence written for a different technology and a different jurisdiction.
Exclusive licences with no recordal and no enforcement provision.
Read your existing licences and find the sentence that says who may sue. If there is not one, that is the first amendment.
Sources & further reading
- The Patents Act, 1970 (consolidated to 1 August 2024) — Official IP India text
Related
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…
Before licensing a patent
Most licence disputes are not about the rate. They are about who may do what, where, and what happens when something changes.
Licensing your patent without giving it away
Define the scope narrowly, decide who can enforce, and say what happens if the patent is narrowed or revoked. The rate is the easy part.
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.
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.