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Patent cross licensing is a process whereby persons or companies provide license rights to each other. It is done for various reasons. One instance where cross licensing will be beneficial is when the two companies trade in the same field.
They want to prevent unnecessary competition, lawsuits for infringement, and the loss of income because the other company has come up with a new invention first. By making use of cross licensing both the companies benefit from their inventions and will have the right to use each other’s inventions.
Another instance, where two companies may apply patent cross licensing is when they work on the same project. This allows each to have access to the required components to complete the project. The patent pool is an example of cross licensing.
The patent pool makes it possible for all the role players as group to hold the patent rights to inventions in their particular industry.
Not only the companies involved, but also the consumers benefit from patent pools. The vehicle industry for one, would not have grown to be as significant as it is today without such and other forms of cross licensing.
By eliminating the risk of infringement and lengthy lawsuits and obtaining access to a wider range of knowledge, companies have more resources to develop superior products.
A drawback of cross licensing is the growth of large monopolies making it difficult for individual inventors to compete and get a market share. Start-up companies don’t normally have the same capital resources as established companies and most certainly cannot compete favourably in an environment where large monopolies exist in specific patent fields.
If you need help with patent registration contact us at Smit & Van Wyk today.
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