This article provides a brief explanation of a “licence of right”, both in respect of a UK national or EP(UK) patent (via the UKIPO), or a German national patent or an EP(DE) patent (via the German Patent and Trade Mark Office, the DPMA).
What is a “licence of right”?
In both the UK and Germany, a patent owner can choose to officially declare that they are willing to grant a licence to anyone who asks. This declaration is known as a “licence of right.”
- In the UK, this is noted in the patent register as “licence of right.” The UKIPO keeps a database of all patents currently in force and which have been so endorsed.
- In Germany, the equivalent term is “Lizenzbereitschaftserklärung vorhanden.”
Once this is recorded, anyone can request a licence to use the patent. The patent owner must then provide a standard commercial licence on fair terms. If the two sides cannot agree, the matter can be settled:
- In the UK: by the UK Intellectual Property Office (UKIPO)
- In Germany: by the DPMA or the relevant patent court
If you own a patent marked “licence of right”
Benefits:
- It is only necessary to pay half the usual renewal fees to keep the patent in force. Both UK and German patent annuities increase from the earliest years after grant through to expiry 20 years from the patent filing date. Savings for patents endorsed as “Licence of Right” can be cumulatively significant, therefore.
- The endorsement may encourage companies to contact the patentee, knowing that they are open to licensing.
How to apply:
- Apply to the relevant patent office (UKIPO for UK patents, DPMA for German patents). Boult has offices across the UK and Germany and is able to support patentees with such applications to endorse a patent as “Licence of Right”, whether or not we are currently listed as the Address for Service in respect of that patent.
- The UKIPO/DPMA will check if there are any restrictions (such as an existing exclusive licence).
- If approved, the “licence of right” status will be added to the official register.
Timings:
- It typically takes 1-2 weeks for the endorsement to be registered, assuming that there are no problems.
- To benefit from reduced renewal fees, we recommend that the patentee apply for the Licence of Right at least one month before the renewal date.
If you want to use a patent marked “licence of right”
If a patent owned by someone else is marked on the Official Register of the UKIPO/DPMA as “Licence of Right,” the owner may be asked to provide a licence. Boult can make that approach on your behalf or you can contact the patentee directly, to negotiate terms such as the royalty fee and duration.
If no agreement can be reached, then:
- In the UK: the UKIPO can decide the terms.
- In Germany: the DPMA or a court can do so if requested. However, the potential licensee should approach the licensor directly in the first instance, rather than the DPMA.
Boult is able to support you in making applications to the UKIPO and/or the DPMA or German courts, through our network of British and German offices.
Cancelling a “licence of right” endorsement
A patentee can apply to have the endorsement “Licence of Right” revoked at any time, both in the UK and in Germany.
UK:
- The owner must obtain agreement from all existing licensees before removing the endorsement.
- All renewal fee discounts must be paid back (that is to say, the reduced renewal fee must be repaid in respect of ALL years since the Licence of Right was first registered at the UKIPO, not just the most recent year).
- A form must be completed (which allows us to declare on behalf of the patentee that no licences are currently in place) and submitted along with the renewal fee top up.
- Once submitted, the UKIPO will advertise the application to remove the Licence of Right endorsement, to allow third parties to oppose the application. After 4 weeks, if no objections to the removal are received, the UKIPO will remove the endorsement.
Germany:
- The endorsement can only be removed if no official notice of intended use (“Benutzungsanzeige”) has been received by the patentee.
- If removed, the same rule applies in Germany as in the UK: previously saved renewal fees must be repaid, in respect of each year of reduced payment (not just the most recent year).
Legal effects in the UK of having a patent endorsed as licence of right
A third party who is accused of patent infringement (with some geographical exceptions to importation) can avoid an injunction by agreeing to take a licence, where the patent of which infringement is alleged is endorsed as Licence of Right.
In this case, the financial liability of the alleged infringer is limited to a maximum of twice the normal licence royalty.
