Patents, licences and random musings

Now let me think ...
After posting sundry musings about patents and licensing, loosely pinned to his reflections on LexisNexis's forthcoming "Licensing Patents & Know-How" conference ( Millennium Mayfair Hotel, Londonn 17 February), the IPKat has received various patent-licence-related items from kind persons who obviously, and probably correctly, feel that his education on the subject would not be harmed by a little extra current reading.

The Kat has also rceived some interesting thoughts from readers relating to patent licensing.  One addresses the issue of "pay-to-delay" patent settlements, which are currently the subject of both controversy and litigation in the United States. The idea is simple and ingenious: patent owners pay generic pharma manufacturers not to challenge the validity of their patents, thus enabling them to continue exploiting their monopolies but effectively sharing the proceeds with what would otherwise be a competitor. Some people think this is a great way to sort out a problem in a way which makes everyone happy except purchasers of cheap generic drugs and enthusiasts of competition law who say that this is all wrong: since patents are presumed valid until proven to the contrary, it doesn't look very brave for big companies to hide behind their presumed weakness as a justification for buying off a prospective challenger -- and isn't there a Sherman Act somewhere about?  So perhaps the solution is not to buy off a challenger but to sell the challenger the patent and buy back an exclusive licence to manufacture, on much the same terms?  The IPKat thinks there may be problems here too, but at least they're couched in different terms.  The Kat now sees that licensing has already been thought of in the context of pay-to-delay, is is apparent from the application for certiorari in Louisiana Wholesale v Bayer (here).

Another reader has, just for the sake of curiosity, raised the issue of non-disclosure agreements.  She was reading the Wikipedia entry on NDAs and observed that they are not characterised there as being licences. But, she insisted, they really should be regarded as such, at least where they permit the use of the licensed confidential information for the purposes attached to the disclosure -- evaluating its technical efficacy, costing out potential use in manufacture, and so on.  The IPKat's keeping an open mind on this one, though he's somewhat doubtful about the proposition -- and he's not sure whether, in the case of NDAs, their characterisation as a licence or not is a distinction without a difference.

You can check out the agenda of Patents and Know-How here, inspect the speakers' credentials here and download the brochure here.
Patents, licences and random musings Patents, licences and random musings Reviewed by Jeremy on Wednesday, January 26, 2011 Rating: 5


  1. NDAs, should they be considered licences? For those of us who haven't previously worried about this, can anyone offer examples in which it would make a practical difference whether they were or not?

  2. No, NDAs are not licences, just as (deep breath) know-how licences are not really licences.

    Commercial agreements allowing use of confidential information are often described as licences, because this makes commercial sense. They are like IP licences, eg patent licences, in many respects, so this is the obvious classification. This usage has become entrenched, eg in the EU Technology Transfer Regulation and its predecessors. But they are not really licences because confidential information is not property (see case discussion on IPKat in the last few days).

    Does any of this matter? Probably not. But it is not a good reason to stretch categories further and call an NDA a type of licence.

  3. @Burpel

    I'm not sure that I agree with this reasoning: "[NDAs] are not really licences because confidential information is not property". Isn't the point that to licence is to allow someone to do something that you have rights you could use to stop them? So you can licence someone to perform acts that infringe your patent TM, copyright, etc. In the case of confidential information, you don't have any particular rights, you just happen to know something they don't (that is in fact why an NDA is required in the first place). So an NDA is not a licence because it does not licence someone to perform acts that you have rights over. Rather, it is an agreement that, in exchange for revealing your confidentail information, actually CREATES rights over that person.

    But regardless of the reason, I certainly agree that it probably doesn't matter. :)

  4. If you look the DVD standard it seems NDA's can effectively work as licenses - access to the DVD standard specifications can only be obtained under NDA via DVD FLL corp upon payment of a fee, of course.

  5. Most TM agents casually agree to consents just to get their clients' TMs on the register and/or to get rid of an opposition but they are licences too with, often, unforeseen consequences given the breadth of modern specifications of G&S.


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