Without a good strategy, buying a patent license can go terribly wrong. Inventors Digest has some advice to help you avoid common problems.
#1 – Believing a term sheet will protect your interests
A term sheet a brief document outlining the terms and conditions of a business agreement. But it’s just the start.
A formal, written licensing agreement is the best way to remove any ambiguity. Most term sheets expressly state they are not binding.
#2 – Not ensuring you can use the technology
Make sure the inventor or licensor owns all the rights and that you, the licensee, are completely free to practice the technology.
#3 – Dealing with the wrong party
Make sure the entity entering into the agreement is the appropriate party to the agreement, that it has the necessary rights, that you know what you are and are not getting, and that any required approvals have been obtained in writing.
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