Licenses “in” are the equivalent of a company’s supplier agreements, except that rather than purchasing products, the company is licensing “in” technology.
There are similar concerns for the buying (or licensing) company – what does the warranty cover? – are spare parts available at reasonable cost? – and there are other issues peculiar to the license realm – can the license be terminated by the vendor, and if so, how to protect the company from losing its license?
These licensing “in” concerns become particularly significant when, as frequently happens, the technology which is licensed “in” is incorporated into the company’s own product or service. Once the licensee has built on and added value to the technology licensed to make its own product, its business has become dependent on the license continuing in force.
Licenses “out” are the equivalent of a company’s product sales agreements, except that rather than selling products to its customers the company is licensing technology to them.
The concerns here are different. The company does not want any of its customers to be able to license the same licensed technology, without modification, to the customer’s customers. If the customer could do so, then it could effectively steal the company’s own business. Not a desirable outcome.
At the same time, the company wants to encourage wider distribution of its technology, to increase its “sales.”
The license “out” needs to balance the company’s twin sometimes inconsistent goals. How it does so depends on the domain and type of the technology – software or hardware, trade secret or patentable invention.
Statements of Work