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International In-house Counsel Journal logoInternational In-house Counsel Journal logo

Licencing of Patent Applications - Pre-Grant Royalty Earning

Abstract

Research and development is costly. International patent portfolios even more so. The business strategy of most corporations, when filing a patent application, is to seek some return on R&D investment, mostly through self-exploitation of the products of R&D, or through royalty earnings from intellectual Property (IP). The time frame between filing a patent application to grant can take many years. Patent offices’ backlogs often result in a three year (or longer) delay before any office actions are issued or an application is reviewed. Opportunities for licensing revenue for a pending patent application are limited and it depends on the specific circumstances (i.e. independent licensing, as part of Merger and Acquisition), the type of invention, technology transfer possibilities, additional know-how underlying to the invention. Legislation provides for the licensing of pending applications in certain countries provided the patent application has been published. The risk of refunding a paid royalty, or forfeiting future royalties for the licensor remains if the patent is not granted, or not granted in a form reading onto the licence granting provisions. What is there to be gained by a licensee by paying a royalty before a patent issues? Attractive alternatives include: • Access to know-how and confidential information (or trade secrets) not disclosed on the patent application but essential to the exploitation of the invention • Access to improvements to technology (whether patentable or not) This paper will consider the provisions of some key countries with regards to pending-patent-licences, the risks for licensors and licensees in acquiring licences for pending patents and alternative options for licensing intellectual property ancillary to the pending patent licence.

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Author

Portrait image of Madelein Kleyn
Madelein Kleyn
Chief Legal and IP Officers, Omnisient Rf Pty, South Africa

Dr. Madelein Kleyn has more than 30 years international experience as intellectual property practitioner, patent attorney and in-house legal counsel in the petrochemical and agri industries. She is presently the Chief Legal Officer of Omnisient (Pty) Ltd a company specializing in data collaboration and anonymization . She also is the CEO and founder of Mad K IP consulting (Pty) Ltd a private company advising clients on IP matters. She is a qualified chemical engineer (BSc Chem Eng), an admitted attorney of the High Court of South Africa and a registered South African patent attorney. She holds a LLM in tax law and PhD in intellectual property law. Her technical expertise is in the area of petrochemicals, chemistry, process engineering, explosives and agriculture. Madelein’s main areas of expertise include IP Portfolio management, IP policy and strategy development and implementation. She regularly advises on corporate governance and IP risk management and specializes in drafting and advising on IP-related business transactions, including technology transfer and licensing. She has authored and presented various articles, papers and publications on IP matters internationally specifically on technology and IP licensing and commentaries on national IP related legislation. Since 2014 she is the co-editor of the textbook “International Pharmaceutical Law” and is also a co-author of the South African Chapter of this publication. She is a member of the SAIIPL (South African Institute of Intellectual Property Lawyers) and also the editor of the SAIIPL newsletter IP Briefs™. She is a member of INTA (International Trademark Association) and CCASA (Corporate Counsel Association of South Africa), ACS (American Chemical Society) and SARIMA ( Southern African Research & Innovation Management Association). She is also member of LES (License Executive Society of South Africa - past president) and a Vice President of LES International. Madelein was included in the IAM Strategy 300 – The World’s Leading IP Strategists since 2015 and featured in WTR300 World’s leading trademark professionals since 2016 and included in IAM Global leaders 2023 and 2024

Company

Omnisient Rf Pty logo

Omnisient Rf Pty

Omnisient provides Software platform that allows for secure, compliant and transformative Data Collaboration. We help businesses unlock the power of 1st party data collaboration without the risks. Mad K IP Consulting (Pty) Ltd is a private IP consulting business that assists clients with IP Strategy development and assisting with commercialisation of IP. www.mad-ip.com

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