International Patent Licensing: Key Considerations

While there are many similarities in patent licensing between U.S. parties and between a U.S. and foreign party, some key considerations should be kept in mind when structuring a cross-border patent or technology license.

Often, the licensor will want payments made in its country and currency. But in an international license this can raise many questions about the timing and rate of currency conversion as well as potential withholding taxes that may be applied on payments leaving the licensee's country. Failure to address these issues up front can result in major disputes in the future if the licensor receives less than it expects due to such issues.

In addition, while all licenses often include provisions for governing law and dispute resolution, reaching agreement on these provisions in a cross-border license often raises different challenges. Unfamiliarity with foreign law and/or foreign courts often leads a party to reject the other party's preferred forum. But choosing a neutral forum in a cross-border transaction can create its own difficulties.

Other vital considerations include, but are not limited to, government approval provisions, export control, differences in IP rights, applicable language, and special termination situations for international deals. By understanding the essential elements to include--and the common pitfalls--in cross-border patent licensing agreements, counsel for patent owners and licensees can prepare to effectively structure and negotiate the contracts in their clients' best interests.

Listen as our authoritative panel of patent attorneys examines cross-border patent licensing agreements, focusing on issues impacted by the international parties involved in the agreement. The panel will offer best practices for structuring the cross-border agreement to avoid litigation, allocate risk, and maximize patent value.