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What kind of patentee would use an open license?

Except promotion license (Article 49 of the Patent Law) and compulsory license (Article 53 of the Patent Law), patent license can be divided into exclusive license 1 (独占实施许可), exclusive license 2(独家实施许可) and general license according to the power of the licensing right granted by the licensor to the licensee.

An exclusive license 1 (独占实施许可) means that the licensee has an exclusive right to use the patent specified in the license agreement in a specific territory during the term of the license agreement;At the same time, the technology licensor shall not implement the patent in the territory, let alone grant the patent to any third party in the territory.

The fundamental difference between an exclusive license 2(独家实施许可) and exclusive license 1 (独占实施许可) is that an exclusive license 2(独家实施许可) does not exclude the licensor's right to exploit the patent itself.

A general exploitation license, also known as a "general exploitation license" or a "non-exclusive license", means that the licensor permits the licensee to use the patent within the specified scope,at the same time, it reserves its own license to use the patent within the scope and to license the patent to others other than the licensee.

The open license stipulated in articles 50 to 52 of the Patent Law is a special license of a general license.

Article 50:Where the patentee has voluntarily declared in writing to the administrative department for patent under The State Council that it is willing to license any entity or individual to exploit its or his patent, and has specified the mode and standard for the payment of the licensing fee, the administrative department for patent under The State Council shall publish it and conduct the open license.Where an opening license declaration is filed for a patent for utility model or design, an evaluation report on the patent right shall be provided.

Where the patentee withdraws the declaration of the open license, it shall do so in writing, and the administrative department for patent under The State Council shall publish it.Where the opening license statement is withdrawn by public announcement, the validity of the opening license granted earlier shall not be affected.

Article 51. Where any entity or individual has the intention to exploit an open license for exploitation of the patent, it shall obtain the license for exploitation of the patent after notifying the patentee in writing and paying the license fee in accordance with the method and standard for payment of the license fee published.

During the period of implementation of the open license, the annual patent fee paid by the patentee shall be reduced or exempted accordingly.

The patentee practicing an open license may grant a general license after negotiating with the licensee on the license fee, but may not grant an exclusive license to the patent.

Article 52:Any dispute arising from the implementation of the open license shall be settled by the parties through consultation.Where the party is unwilling to consult with the patent administration department under The State Council, or the consultation fails, it may request the administrative department for patent under The State Council to conduct conciliation, or may institute legal proceedings in a people's court.

Any entity or individual may, if it so wishes, notify the patentee in writing, and after paying the licensing fee in accordance with the announced mode of payment and the licensing fee standard, it shall obtain a license for exploitation of the patent.

Who is the patentee who chooses the open license?

Among the patents owned by the patentee, there are some non-core patents. These non-core patents are not the main direction of the patentee's research and development. And if the patentee pays an annual fee, the cost will increase.

Looking back at the law, we find that article 51 records that "during the implementation of the open license, the annual patent fee paid by the patentee shall be reduced or exempted accordingly".  

Therefore, for the patentee who owns some non-core patents and these non-core patents are not the main direction of research and development, it may be appropriate to choose the open license mode in order to save the annual fee cost.  

Some universities and scientific research institutes have patents, but they may not have the ability to implement the patent temporarily or lack the ability to operate the patent. As a result, the technology transformation efficiency of their patents is not high, and the implementation and application degree is low. So the choice of open license is also appropriate.

In addition, patentees who are willing to surrender some of their rights for public health or public interest may also choose open license.


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