The Palgrave Encyclopedia of Strategic Management

Living Edition
| Editors: Mie Augier, David J. Teece

Licensing

Living reference work entry
First Online:
Received:
Accepted:
DOI: https://doi.org/10.1057/978-1-349-94848-2_775-1
How to cite

Abstract

An intellectual property licence grants a licensee rights to use intellectual property (IP) owned by others. The licensee is granted an exchange for a royalty or other financial or non-financial consideration. Licensing enables an intellectual property (IP) owner to commercialize an invention more widely by accessing complementary capabilities of other firms to bring it to market. Licensing can expand the use of an invention and the earnings of the owner, increasing incentives for innovation and speed diffusion. The consideration received for a licence depends on the commercial usefulness of the invention as well as on the strength of the appropriability regime. Licensing carries risks and unless used carefully may not be as profitable as in-house commercialization where that is feasible.

Keywords

Intellectual Property Intellectual Property Protection Most Favoured Nation Royalty Rate Relative Bargaining Power 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
This is a preview of subscription content, log in to check access.

References

  1. Caves, R., H. Crookell, and P. Killing. 1983. The imperfect market for technology licenses. Oxford Bulletin of Economics and Statistics 45: 249–267.CrossRefGoogle Scholar
  2. Goldscheider, R., J. Jarosz, and C. Mulhern. 2002. Use of the 25 percent rule in valuing IP. Les Nouvelles: Journal of the International Licensing Executives Society 37: 123–133.Google Scholar
  3. Grindley, P., and D. Teece. 1997. Managing intellectual capital: Licensing and cross-licensing in electronics. California Management Review 39: 8–41.CrossRefGoogle Scholar
  4. Lemley, M., and C. Shapiro. 2007. Patent holdup and royalty stacking. Texas Law Review 85: 1991–2049.Google Scholar
  5. McDonough, J. 2007. The myth of the patent troll: An alternative view of the function of patent dealers in an idea economy. Emory Law Journal 56: 189–228.Google Scholar
  6. Sherry, E., D. Teece, and P. Grindley. 2000. Understanding the licensing option. In Managing intellectual capital, ed. D. Teece. Oxford: Oxford University Press.Google Scholar
  7. Sullivan, P., and S. Fox. 1996. Establishing an out-licensing activity. In Technology licensing: Corporate strategies for maximizing value, ed. R. Parr and P. Sullivan. New York: Wiley.Google Scholar
  8. Teece, D. 1986. Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research Policy 15: 285–305.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2016

Authors and Affiliations

  1. 1.Berkeley Research GroupLondonUK