Tips for Licensing Your Intellectual Property
What the laws say in Ohio when you want to grant the use of your idea
on December 16, 2020
Updated on August 15, 2022
Intellectual property (IP) makes a large share of the total value of all assets held by many American businesses. According to a recent assessment from the World Intellectual Property Institute (WIPO), the value of the world’s intellectual property is growing faster than that of tangible assets.
Your company may want to license its intellectual property in order to best utilize it and enhance its overall value. But first, make sure you actually have that right. “It’s not unusual for a party to believe it has ownership rights in the intellectual property it possesses, when in fact upon review they learn they have only a limited license which does not allow for granting rights to others,” says Eric M. Robbins, an intellectual property attorney at Ulmer & Berne in Cincinnati. “This is often seen in the context of copyrights and computer software. For example, a party often assumes that because they pay a contractor to write code for them that they then own the code. But unless there is a properly worded written agreement giving the party ownership, the contractor typically owns the code.”
Below, you will find an overview of Ohio law on intellectual property licensing and four actionable tips for coming to an agreement.
Ohio Law: You Have the Right to License Intelletual Property
Intellectual property is a form of property. It carries the rights and benefits of other types of property ownership. Under Ohio law (OAC § 3356-10-18), intellectual property is defined in a relatively broad manner. The term includes inventions, patents, copyrights, trademarks, and trade secrets.
State law establishes rules and standards for the ownership, distribution, and commercialization of IP and IP rights. Notably, Ohio law empowers intellectual property holders to transfer their rights to another party. In this way, intellectual property is similar to tangible property. You or your business has the right to license IP rights if you choose to do so.
Four Tips for Licensing Your Intellectual Property in Ohio
Commercial agreements are complicated—especially those involving the licensing of IP rights. Before finalizing any contract, it is crucial that your company is in the best position to protect its interests. Here are some tips for licensing intellectual property in Ohio:
Make Sure Your IP Rights are Established/Protected: While many IP rights are automatic, you can enhance protections by taking formal steps to establish your rights. Trademarks are a useful example. As explained by the United States Patent and Trademark Office (USPTO), there are several advantages to registering a trademark at the federal level.
“An experienced intellectual property attorney can confirm a client’s ownership and ability to freely use technology, and can appropriately document any transfer of rights in that technology to others without jeopardizing legal protections for the technology or assuming excessive liability risk,” says Robbins.
Know the Value of Your Intellectual Property: Before you can effectively license your IP rights, you must know the economic value of those rights. A comprehensive intellectual property audit can pay major dividends.
Do Your Due Diligence on the Relationship: Ultimately, an IP licensing agreement is a business partnership. Be sure that the firm you are entrusting with your intellectual property is a strong partner.
“When an owner of intellectual property grants rights to another, the owner should be wary to warrant the other party freedom to practice those rights—due to the possibility of a third party having senior rights,” says Robbins.
Consider Non-Disclosure Agreements During Negotiations: It is often a best practice to sign a non-disclosure agreement when beginning formal IP licensing negotiations. Such a contract will help to ensure that confidential information and intellectual property rights are protected.
“An experienced intellectual property attorney should be involved to assist with each of these stages,” Robbins says. “And if there is ever a breach or infringement of your rights, or if you sense you may risk infringing the rights of others, you should promptly consult with an experienced intellectual property attorney. It’s important to research and identify an attorney with the expertise and experience to assist, and who will never lose focus upon your specific business interests.”
IP licensing is complicated, and companies can benefit from seeking professional guidance for any legal issues. If you have any specific questions about patent licensing, copyrights or trademarks, contact a law firm and seek legal advice from an experienced Ohio intellectual property attorney for immediate help—who will help you negotiate an agreement that complies with state and federal law, and effectively protects your interests.
For more information about this area of the law, please see our overview of intellectual property law.