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What Is a Cross License Agreement

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Cross-licensing agreements create a number of important advantages: some companies file patent applications primarily to be able to cross-license the resulting patents, rather than trying to prevent a competitor from bringing a product to market. [5] In the early 1990s, for example, Taiwanese manufacturers of original designs such as Hon Hai rapidly increased their patent applications after their U.S. competitors filed patent infringement lawsuits against them. [6] They used patents to cross-license. Furthermore, I find it hard to believe that the government would be actively trying to prevent mutual licensing. Cross-licensing appears to be pro-competitive rather than anti-competitive; but I think a particular cross-license might require not negotiating with others, and that could actually be anti-competitive. The costs associated with mutually licensed intellectual property are prohibitive for most start-ups. Antitrust authorities are not interested in cross-licensing portfolios that contain provisions that could lead to anti-competitive agreements such as market sharing or pricing. Patent pools are also subject to rigorous scrutiny to ensure that they do not unfairly undermine competition or reduce incentives to innovate. One of the most serious concerns about full cross-licensing agreements is that they create an almost impenetrable barrier to intellectual property rights for new entrants to the industry.

The cost of licensing cross-licensed intellectual property can be prohibitive for most startups. Antitrust authorities are particularly cautious about cross-licensing portfolios with provisions that could facilitate anti-competitive collusive activities, such as pricing. B or market division. Other non-patented intellectual property rights, such as copyright and trademarks, may also be subject to counter-licensing. For example, a literary work and an anthology containing that literary work may be mutually licensed between two publishers. A cross-license for computer software may include a combination of patents, copyrights, and trademark licenses. The problem seems to be that a market player basically needs to get a license for the entire portfolio of all the major players in the industry to get in. Without its own patents as a bargaining chip, the costs are prohibitive. Costs are not due to existing cross-licensing.

The costs are due to the need to mutually license the patents of market participants. If you think your Dallas/Fort Worth business could benefit from a cross-licensing agreement, we`d like to help you explore your options. Call the lawyers at Gagnon, Peacock & Vereeke, P.C., at (214) 824-1414 to speak with a qualified lawyer who can give you the advice and support you need today. But cross-licensing is not just a barter to fend off IP lawyers or reduce royalties – it can and should be the basis for forward-looking alliances that drive the flow of knowledge and drive innovation after licensing. Studies have shown that the duopoly gain from cross-licensing may be greater than the benefit of a monopoly scenario. Here are some of the main benefits of cross-licensing: A common motivation for entering into a cross-licensing agreement is not to spend limited resources on a lawsuit and counterclaim for alleged patent infringement. Companies can negotiate an out-of-court settlement where they can exchange their intellectual property rights and value. Cross-licensing is not a way to reduce and reduce lawyers` fees or royalties. Instead, it should form the basis for long-term alliances that can foster the flow of knowledge and trigger post-licensing innovation. At Gagnon, Peacock & Vereeke, P.C., our intellectual property lawyers have years of experience protecting the intellectual property rights and interests of individuals and businesses in the Dallas/Fort Worth area. Our legal team can help you enter into a cross-licensing agreement or other type of intellectual property agreement. Companies that choose to enter into cross-licensing agreements, sometimes referred to as patent pools, can enjoy a number of advantages: cross-licensing refers to the cross-licensing agreement between patent holders entered into to avoid litigation over conflicting patents.

It helps maintain financial incentives for inventors to commercialize their existing innovations and conduct potentially patentable new research. In patent law, a cross-licensing agreement is an agreement under which two or more parties grant each other a license to exploit the subject matter claimed in one or more of the patents each holds. [1] As a general rule, this type of agreement takes place between two parties to avoid a dispute or to resolve an infringement dispute. [2] Very often, patents held by each party cover various essential aspects of a particular commercial product. Through mutual licensing, each party retains its freedom to place the commercial product on the market. The term “cross-licensing” implies that neither party pays financial royalties to the other party, although this may be the case. A few examples of mutual IP licensing are a few recognizable companies: One of the biggest concerns of full cross-licensing agreements is that they create an almost impenetrable barrier for newcomers to the industry. For example, Microsoft and JVC entered into a cross-licensing agreement in January 2008. [3] Each party is therefore in a position to put into practice the inventions covered by the patents contained in the agreement. [4] This benefits competition by giving everyone more freedom to design products that fall under the other`s patents without causing a patent infringement lawsuit. So what can be wrong with all these cross-licensing benefits? Here are some of the drawbacks that companies considering cross-licensing of ip should consider: The economic literature has shown that companies with high capital intensities are more likely to enter into a cross-licensing agreement.

[7] A cross-licensing agreement is a contract between at least two parties that grants reciprocal intellectual property rights of both parties. The agreement can be a private agreement between two specific companies or a small consortium of companies. Or it could be a public agreement such as a patent pool, in which the management of intellectual property is shared by a relatively large group of patent holders who share patents. Patent pools are usually industry-based, and companies operating in the industry can join the pool for free. One of the limitations of cross-licensing is that it is inefficient vis-à-vis patent holding companies. The main activity of a patent holding company is to license patents for a monetary fee. Therefore, they do not need rights to practice the patents of other companies. These companies are often pejoratively referred to as patent trolls. When done wisely and strategically, everyone benefits from the mutual licensing of technology patents – the companies themselves, industry and consumers. However, there is a need for antitrust, anti-collusion and other patent litigation regulators to keep an eye on the increasingly broad cross-licensing agreements to ensure that healthy competition is maintained. Therefore, one of the most common motivations for cross-licensing agreements is to avoid spending valuable resources on prosecution and counterclaim for alleged patent infringement. Cross-licensing allows companies to reach an amicable settlement in which they exchange their respective value and intellectual property rights.

The counterfeiter/competitor now becomes an ally. It`s not just the parties that cross-license that win. Cross-licensing of patents in the automotive industry, for example, has made low-cost generic parts available to the general public. And it is generally accepted that mutual patent licensing creates an innovation ecosystem that produces new and superior products for the benefit of all. In addition to the general benefits, some cross-licensing agreements are based on a no-cost condition, so even more money can be saved. While the benefits far outweigh the costs, these agreements are legal contracts that companies enter into with their competitors. For this reason, companies considering this type of contract should always consult a qualified lawyer to protect their own interests. There are recognized patent pools such as MPEG-2, RFID and DVD that are industry specific. In the respective patents, each party has rights to various crucial aspects of a particular commercial product. Through mutual licenses, each company or party retains its freedom to manufacture the commercial product for sale. And under the terms of the cross-licensing agreement, neither party is responsible for paying the other party financial royalties. Parties entering into cross-licensing agreements must be careful not to violate antitrust laws and regulations.

This can easily become a complex issue concerning (as far as the European Union is concerned) Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), formerly Articles 81 and 82 of the EC Treaty (abuse of dominant position, etc.), licensing directives, cartels, etc. When it comes to intellectual property, many companies find cross-licensing agreements incredibly beneficial. A cross-licensing agreement is a contractual agreement between two or more parties in which each party is granted rights to a technology, product, research or other subject matter. .