Licensing is leading to emerging IP agreements
More Life Sciences companies are exploring licensing intellectual property (IP) rights to other entities. For example, a biotech company may license rights to a drug compound in development to a pharmaceutical company. Other entities may out-license the rights to a commercialized product to another entity. Contracts may contain sales or usage-based royalties, guaranteed royalties and advance or fixed payments during clinical R&D phases.
Patent rights have attributes
of their own to consider when
partnering with another entity:
Limiting
territory
Limiting
time
Limiting
the scope
Patent Rights Example: A drug manufacturer begins a 3-year contract with a customer who grants another entity the exclusive right to a drug formula in the United States and Canada for the term of the contract. However, the customer can only use the formula to produce a drug that treats a specified illness. The rights to the drug formula in the United States and Canada both commence on January 1, year one. The term of the license (3 years), the geographical scope of the license (United States and Canada only) and the usage limitations (only producing drugs that treat a specified illness) define the scope of a Customer’s rights
