There has been a lot of discussion recently about the value of intellectual property (IP) in the context of the debate around patent reform.  Much of the dialog has centered around the licensing or enforcement of rights associated with patents which are one form that IP can take. The U.S. Supreme Court ruling today in Kimble v. Marvel, No. 13-720 reaffirmed a long-standing precedent that the royalty payment obligation for a patent license expires when the patent expires. This USA Today article provides a brief overview of the issue and ruling. Since many patents could be well into their 20-year life by the time they are licensed, the potential return on investment may be limited.

Other forms of IP that can be imparted or transferred to a licensee are actual technology in the form of product designs, prototypes, software code, etc. and know-how from the inventors on how to make use of the technology and patents. A “technology license” can include these elements in a package of IP that is being licensed. The licensor then has the ability to attach a royalty to the bundle of technology/IP being licensed giving them the potential for a longer runway for royalty income.

I have worked on IP transactions where, by the time the decision is made to approach potential licensees, the only thing left to license/transfer are the patents. The inventors are on to other things, the prototypes are lost, the code is out of date……. The lesson here is that if you are developing valuable inventions that could be of benefit to others via license or tech-transfer it is important to be able to include tangible technology as well as know-how in your package of IP. This can pay big dividends if your licensed IP is integrated into a successful product or products since you will be able to collect royalties as long as your technology is being used.

MJK Partners, LLC  provides strategic advisory and transaction services to facilitate the licensing, transfer or sale of technologies and intellectual property.  If we can help you with a project – Contact us here.