In Licensing Vs Out Licensing Definition
The following article describes what it means to license a drug and how licensing is different from an acquisition. It also covers how royalties affect returns. It is important for investors to be aware of these subtleties so that they can correctly interpret a company`s shares and choose to buy or sell at the right time. Those entering into a licensing agreement should consult a lawyer as there are complexities that are difficult to grasp for those who do not have a thorough understanding of intellectual property law. However, if the goods in question are not ordinary goods but luxury goods, the licensors are still concerned that the licensee`s act could damage the reputation of the mark or seriously damage the goodwill of the company. Well, in such circumstances, licensors always explicitly mention the extent and scope of the use and distribution of the goods, and any action that violates the terms of the license agreement leaves the licensor with the opportunity to object to the resale of those goods by the licensee if such resale is detrimental to the reputation of the brand. [17] When I license a product to you, I license it and you license it. If I grant you a license for a product, then I am out of license and you are licensed. [42] BioMedReports: Sun pharma moebius medical signs an exclusive global licensing agreement to develop a novel liposome (2016). Chatham: Newstex. Excerpt from , accessed December 20, 2017 In-licensing is cost-effective because it shares the financial burden of product development. This is also a lower risk for the company, as it can close deals based on promising preclinical or clinical outcomes.
Compare this to the traditional drug discovery process, where a company tackles a project and invests heavily in its development – all with little data to support expectations. Once the value or potential of your brand is recognized in a particular niche locally, nationally or globally, it can be used as a strategic tool for brand growth, bringing a new product to market, etc. With the trademark license, you rent or sell the rights to your brand name, logo, or intellectual property to a partner company to use its products. The rented trademark will be used within a certain period of time and for specific purposes on the basis of the contractual agreement between the two companies. The licensor then receives financial compensation for the leased intellectual property. This process is primarily about finding partnerships with a licensed company or company to support the manufacturing, development, production, sales or marketing of products. Licensor and Licensee have a mutual agreement to develop or commercialize the drug, patent, trademark or technology in exchange for a one-time payment, upfront payment, milestone payment or royalty payment at the end of a particular stage of development or commercialization. These agreements are based on consideration. Most pharmaceutical companies tend to opt for payment plans that include a recurring payment of fees.
According to a 2017 LIMA survey of licensed products, the United States and Canada are the world`s leading licensed merchandising markets with total sales of $152.3 billion, followed by Western Europe, particularly France, Germany and the United Kingdom. North Asia and China also joined the league, with total sales of $24.5 billion. [53] In this global market scenario, each country`s objective and objective is to be equipped with the latest technologies in order to survive in the highly competitive market. However, when we do market analysis, we see a striking difference in the approach of developing and developed countries to technology. While the majority of developed countries have already developed the latest technological means, developing countries are still striving to acquire this technology. Therefore, in order to enter unknown markets, it is essential to conduct global market research before licensing a technology or product. What may be useful and effective in a particular market or geographic state may not be useful in a particular location. If we take the examples of wool clothing and trench coats, where they are a necessity in colder regions, those in tropical or temperate zones may have little or no use. Finally, another advantage of licensing from the licensor`s perspective is that the licensor can retain ownership of their invention, product or trademark, while earning royalties for it. Since it is generally accepted that, unlike licensing, there is no transfer of ownership to the licensee, the licence creates an enabling environment for the licensor to benefit from the maintenance of ownership of its intellectual property and the collection of royalties in return. In the following video, David briefly explains the pharmaceutical licensing process, which includes both external licensing and licensing. It consists of 8 different and consecutive steps, the most critical of which is the first: the licensing strategy.
As with any business process, if you don`t know where you`re going at first, the only certainty is that you won`t make it! This strategy determines which products a company may want to license internally or externally. Now that you know a little more about licensing, will it affect how you invest in pharmaceutical companies and why? Let us know in the comments below. In this agreement, Norgine is the sole licensor, which means that it licenses a product from AMAG; AMAG, which grants its product license to Norgine, is the sublicensee. These offers are popular because they allow one company (in this case, Norgine) to take on some of the financial, regulatory or technological burdens associated with developing another company`s product (in this case, AMAG). Both ultimately benefit. An example of a restaurant license agreement would be if a McDonald`s franchisee has a licensing agreement with McDonald`s Corporation that allows them to use the company`s branding and marketing materials. And toy manufacturers regularly sign licensing agreements with movie studios, giving them legal authority to produce figurines based on the popular similarities of movie characters. brandway.com/en-4/ways4brands/brand-out-licensing/?cookie-state-change=1609967154938 The University of Campinas, popularly known as Unicamp, is one of the top ten universities in Brazil and Latin America.[6] With the help of its technology transfer office – Inova – the Brazilian university was able to achieve great success for its inventions in the space of seven years.
Where the university started from scratch in 1962 as a small research center, the university is now known worldwide for its research. Unicamp has managed to shape many technologies and is known to have concluded 128 licensing agreements in just two and a half years. The Brazilian university “Unicamp” had granted a license “Biphor” to an agricultural company called “Bunge”. [7] “Biphore is a white pigment based on aluminum phosphate nanoparticles”[8], which is mainly used in the field of nanotechnology. Under the terms of the agreement, Unicamp managed to obtain royalties of 1.5% for the period of twenty years, as well as royalties of 33%, to be paid to the inventors. Recurring payments of license agreements are of great benefit to the licensor and also to the licensee. Pharmaceutical companies can use licensing to access new or foreign markets and expand their portfolio. Licensees whose market positions are threatened by competing companies can also benefit by launching new products on the market. The licensor and licensee also have a reduced risk of business development. Not always, but a license agreement can bring benefits to the licensor if the licensee develops or improves the product/invention. .