A Patent License Agreement grants rights to use, manufacture, or sell an invention covered by a patent. This playbook focuses on negotiating royalty structures, field-of-use restrictions, and ownership of improvements.
Why This Matters: Overly broad warranties expose the licensor to extensive liability, while insufficient protections leave the licensee vulnerable to defective or infringing IP.
Negotiation strategy
If you're the Licensor:
Ensure that warranties are limited to material breaches and include reputable defenses. Clearly define the scope to avoid unnecessary liability.
If you're the Licensee:
Negotiate for comprehensive warranties that protect against defective or infringing IP. Ensure remedies are practical and enforceable.
Essential elements
1
Ownership Warranty
Assures sole ownership of IP.
2
Validity Warranty
Confirms IP is valid and enforceable.
3
Non-Infringement Warranty
Ensures no third-party infringement.
Action framework
ACCEPT
Propose edits when warranties are too broad or lack clarity on remedies.
EDIT
Reject clauses that expose to unlimited liability or lack material breach limitations.
ADD
Add clauses when warranties are missing or insufficient to protect interests.
PRO TIP
Always align warranty clauses with jurisdictional requirements to ensure enforceability.
Example clauses
FAVORABLE
Comprehensive Ownership Assurance
"The Licensor represents and warrants that it is the sole and exclusive owner of the Licensed IP and has the full right and authority to grant the licenses set forth in this Agreement without violating the rights of any third party."
NEUTRAL
Basic Validity Assurance
"The Licensor warrants that, to the best of its knowledge, the Licensed IP is valid and enforceable. The Licensor makes no warranty regarding the validity of the Licensed IP beyond this representation."
UNFAVORABLE
"The Licensor warrants all aspects of the Licensed IP without limitation, exposing to potential unlimited liability."
High-Risk Projects
Fallbacks
Cross-Border Licensing
Adjust warranties to account for different jurisdictional laws and potential international IP disputes.
Start-Up Ventures
For start-ups, balance warranties to protect innovation while not stifling growth with excessive liability.
Licensing & IP Playbook Template (Pro both parties)
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WEEK 2
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WEEK 3
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WEEK 4
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