Difference between revisions of "Patent License Design"

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The Model Patent License is a simple and streamlined CC legal tool for licensing patents. It was originally developed to enable the standard licensing of patented technologies that have the potential to promote sustainability for the GX project, but Creative Commons will host and maintain it as a standard CC legal tool, so that will be made available for free to any member of the public to use for any purpose even outside of the context of GX.

Goals

The principle goals of the Model Patent License are:

• to facilitate standardized "public offers" to license patents in order to reduce negotiation costs and risks;
• to promote technologies that have the potential to improve global sustainability or public health; and
• to increase the number of patent licenses available for broad categories of innovative and entrepreneurial uses.

Features & Hot Topics

Non-Exclusive License

The Model Patent License is a non-exclusive patent license, meaning that the patent owner can grant similar licenses to many parties. In contrast to an exclusive license, which gives exclusive rights to practice and sublicense to a single licensee, a non-exclusive license can be granted independently to many people and companies. Because exclusive licenses are typically more complicated and can only be granted to a single licensee, we chose not to work on standard exclusive licenses.

Discussion Topic: What are the roles of exclusive and non-exclusive licenses in different situations? Do you see a need for a model license that is an exclusive license?

Fields of Use

By default, the License allows the patent owner to authorize uses in all fields of use (i.e., without any field of use restriction). We deliberately designed the default this way to encourage patent owners to license for the broadest possible set of uses, consistent with our desire to promote innovative uses. However, if they choose to do so, licensors have the option to specify a particular field of use restriction for the license, by way of the License Data Record, which serves to define and delimit the scope of the license. We left the definition of the field of use free-form and how it is defined is at the discretion licensor. This flexibility is absolutely necessary to accommodate the widest possible range of fields that would be dictated by varying industries, markets, companies, and business models. In the future, we may work with certain industry groups and consortia to develop standard fields of use model that can be adopted as standards by particular industries, communities, or consortia.

Discussion Topic: Should we support the option to include a field of use restriction? Should we place any constraints on the way fields of use are defined? What are some opportunities for standardizing fields of use?

Fees & Royalties

The Model Patent License is free of any fees or royalties by default. We designed it this way to encourage patent owners to first consider making technologies available without fee in order to facilitate their widespread adoption and use for a wide range of socially important uses. However, the License gives the licensor the option to require fees or royalty payments in the License Data Record. If the licensor chooses to use this option, the licensor has the flexibility to define the license fee or royalty model in the License Data Record. While licensors have that ultimate flexibility, we strongly encourage licensors to implement fees that are reasonable and non-discriminatory.

Discussion Topic: Should we support the feature to have an optional fee structure? What constraints, if any, should be placed on that feature? How can we do more to encourage reasonable and non-discriminatory fees?

Licensed Patent Rights

The patents and patent applications included in the scope of the License is defined by the "Licensed Patent Rights". This definition includes not only those patents and applications listed by name in the License Data Record, but also certain related patents and patent applications and their claims. For example, continuations and divisionals of the listed patents or patent applications are included automatically, and claims of continuations-in-part that are entitled to claim priority back to the listed patents are also included in the definition.

While we discussed the inclusion of parent applications as well, to the extent this would cover similar subject matter, this was not implemented due to objections from some commentators that to do so creates unnecessary ambiguities and that licensees are in a better position to mitigate those risks through active patent due diligence.

For example, it was argued that parent applications may be broader than the listed applications and the licensor may not wish to license those broader claims. Furthermore, it has been argued that because priority is determined by reference to parent specifications, not individual claims, there is no objective and unambiguous criteria for defining the scope of the parent claims to be licensed based solely on the priority claims of the daughter application. Because priority claims must be disclosed in a patent, a licensee can readily determine if parent applications exist by reading the patent. Thus, with a basic level of due diligence, a licensee can determine if parent patents exist and whether it also needs to license those from the licensor. If so, the licensee and licensor can enter into negotiations for the inclusion of those patents or for them to be licensed separately.

For these reasons, the current draft's definition of Licensed Patent Rights includes daughter applications but not parent applications. Potential licensees will be advised to read the licensed patents carefully to determine whether there are any referenced parent patents that need to be considered and bargained for.

Discussion Topic: Is the definition of Licensed Patent Rights appropriate in scope? Do you agree with the above approach in balancing the risks of uncertainty vs. the diligence obligation on licensees? Are there other ways to define the Licensed Patent Rights that would help solve the problems discussed above?

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