Licensing

A licence is permission, not a sale. The difference decides who can sue, who can improve, and who keeps the asset if the deal ends.

In simple words

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 usually limited by field, territory and time.

Think of it as

Renting out the right to cross the fence.

Why it matters

Field-of-use and territory limits are where most licence value is created or lost. Whether the licensee can sue infringers, what happens to improvements, and whether royalties survive invalidity are the clauses that matter and the ones most often left vague.

A simple example

A licence for “industrial use in India” does not permit consumer sales, and does not permit export - unless the agreement says so.

Common mistake

Signing a licence without deciding who controls enforcement. Without that clause, a licensee may find they cannot stop an infringer and the patentee has no incentive to.

Where it comes from

Patents Act 1970, sections 68, 69 and 70; compulsory licensing in sections 84 to 92