Patents are of added value if you want to protect your Intellectual Property, but they can be a real pain if you are on the other side of the table. For example, if you want to bring a product onto the market of which the Intellectual Property rights fall under a valid patent held by someone else.
Suppose you have conducted a safeguard investigation and discovered that there is a potential problem: there is a patent which appears to be novel and inventive and is still valid. Ignoring it or relying on invalidity is not an option in that case. So what can you do if you want to safely enter the market without infringing any rights?
You then have the following options at your disposal:
You can ask the patent holder for a licence so that you are allowed to produce or operate the patented invention. The patent register sometimes even states that licences can be applied for. In that case you agree with each other the amount, period and market you are going to get this permission for.
There are various different types of licences:
- In the case of an exclusive licence only one person is granted the right to manufacture or operate the invention. Even the patent holder will then have to cease all activities.
- A sole licence grants one person beside the patent holder the right to exploit the invention commercially.
- The exchange of licences is referred to as cross-licensing. This can be of interest to both parties, as it gives them access to new knowledge without encroaching on each other's territory.
- In the case of the non-exclusive licence the patent holder determines how many other legal entities he is going to grant a licence.
- There may also be a licence pool, when several companies work together and jointly grant licences.
Is it compulsory to grant a licence?
It is not compulsory to grant a licence. The refusal by the inventor of rusks with an indentation to grant a licence is an example of this. The situation is different when the patent holder occupies a dominant position in the market. If an invention has been standardised in the market - a USB port, for example - then the patent holder cannot refuse a licence application under reasonable conditions. The European Commission has determined that this would otherwise be in violation of competition law.
2. Buy your competitors patent OR buy the whole company
It might be possible to buy the patent via a patent auction, for instance. The patent holder might be interested in this or may even want to sell the entire company. One of the reasons large companies sometimes take over smaller companies is because of the patent rights. For example, pharmaceutical company Bayer wanted to take over plant breeder Monsanto. (Incidentally competition law also plays a role here.)
3. Engineer-around, work-around or design-around the patent
These are all phrases used for developing something around a patent. In this case it is important that you have someone carefully examine the patent, so you know just how much room you have to play with.
Simply replacing a screw (as stated in the patent) with a nail is often not enough. The judge will decide that this is an equivalent as a result of which you can still be accused of infringing.
Fortunately there are generally enough opportunities to get round a patent. The funny thing is that these cases sometimes lead to unexpected other inventions.
Finally: patent rights expire: always! So sometimes it is just a matter of time before you can freely enter the market.
In short: if you are infringing Intellectual Property rights, there are plenty of ways in which you can respect the IP rights of others and still safely enter the market.