ITPEC IP October 2020 Question 85
Which of the following is an approach among two (2) or more companies, where each of them is granted the right to use the technologies patented by the other parties?
Explanation
Cross licensing — two or more companies each grant the others the right to use their patented technologies.
In a cross-licence the patent holders exchange licences, often with little or no royalty changing hands, so that each may use technology the others have patented. Ownership of the patents does not move. It avoids infringement disputes where products depend on several companies' patents, as is common in semiconductors and electronics.
Answer (b)
Why not others:
- •(a) Alliancing — cooperation between companies in general (joint development, sales tie-ups, capital alliances); it does not in itself mean granting each other patent rights
- •(c) Joint venturing — setting up a new company that the partners fund and manage together
- •(d) Loyalty — customers' attachment to a brand or store; not to be confused with a royalty, the fee paid for a licence
Key rule: A licence lets another party use a patent without transferring ownership; a cross-licence is that permission exchanged in both directions.
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