Licence of Right

This page explains the consequences of a UK patent before the UK Intellectual Property Office (UKIPO) and a German patent before the German Patent and Trade Mark Office (DPMA), (whether owned by you or someone else) being endorsed “licence of right”. This also applies to UK or DE patents which have been obtained via a European patent application.

General

For some patents, the proprietor may choose to have the official register marked (or “endorsed”) “licence of right” (UKIPO) or “Lizenzbereitschaftserklärung vorhanden” (DPMA). This means that, if anyone wants a licence under the patent, the proprietor must grant them one. This will be an ordinary, commercial licence, on terms agreed between the proprietor and the licensee. However, if they cannot agree terms, the matter can be referred to the UK Intellectual Property Office, who will then decide on fair terms for the licence. In Germany, the license terms can be decided by the German Patent and Trade Mark Office or the Patent courts, if so requested by one party.

If your patent is endorsed "licence of right"

The renewal fees payable are only half what they would be otherwise. This is the main advantage to you. Such an endorsement may also help to attract licensees by indicating your willingness to grant a licence.

Procedure

If you have a patent you wish to have endorsed “licence of right”, it is necessary to apply to the relevant national patent office, i.e. the UK Intellectual Property Office for a GB patent or the German Patent and Trade Mark Office for a DE patent,. The office then checks that there are no obvious reasons why this should not be done (primarily that you have not already given someone an exclusive licence). 
If there are no problems, the Register will be duly marked.

If you apply to have the register of a patent marked “licence of right”, it takes at least ten days for this to take effect. Therefore it is sensible to apply at least one month before a renewal fee is due, to ensure that the fee will be payable at the lower rate. The cost of the procedure of getting the endorsement made is such that there will certainly not be any saving in the first year. But if the entry remains in force for many years there can be appreciable savings.

If someone else’s patent is endorsed "licence of right"

You may approach the proprietor of a patent marked “licences of right” for a licence. The terms (e.g. royalty rate, duration, etc.) of the licence are subject to the usual commercial negotiation, but may be decided by the UK Intellectual Property Office or the German Patent and Trade Mark Office on application by the proprietor or potential licensee if an agreement cannot be reached.

Other information

1. If a UK patent is endorsed “licence of right” and the proprietor wishes to cancel the endorsement, this can only be done if all existing licensees agree. If a German patent is endorsed “licence of right” and the proprietor wishes to cancel the endorsement, this can only be done if no declarations of intended use (“Benutzungsanzeige”) have yet been filed by a party wanting a licence.” If the endorsement is cancelled, all of the savings that have been made on the half-rate renewal fees must be repaid.
2. In the UK, one of the consequences of having a “licence of right” endorsement on the Register is that a defendant to proceedings for infringement (otherwise than by importation of an article from a country outside the EEA) of the patent may, by undertaking to take such a licence, avoid the grant of an injunction against infringement and limit his liability for damages to a maximum of twice the licence royalty.
3. Existing licensees may ask the UK Intellectual Property Office at any time to exchange their licences for licences of right on terms which may be settled by the UK Intellectual Property Office.
4. The UK Intellectual Property Office maintains a database of all patents in force in the UK which are endorsed with “licences of right”. This database can be accessed via the UK Intellectual Property Office website.

This information is simplified and must not be taken as a definitive statement of the law or practice.