Life after death: the post-expiry patent royalty payment loophole

Maximizing the value of your patent portfolio is a key objective for any organization.  The bulk of that value comes from commercialization of products under patent protection. But what about those patents that are unused or unwanted?

Realizing a return on these types of patents usually revolves around their sale or license which provides another source of revenue for patents that were otherwise sitting on the shelf. Once those unused patents are identified, you have a big decision: do you sell, or do you license that technology?  

There are pros and cons to both approaches.  But for licensing agreements, there is a particularly important consideration – what happens to the royalty payments once the patents cease?

Since 1964, collecting post-expiration royalties has been per se patent misuse and impermissible. However, royalties “may run until the latest-running patent covered in the parties’ agreement expires.” Since then, transactional attorneys and litigators alike have been testing the waters to determine the reach of this fascinating loophole.

Learn more about the case law surrounding post-expiry patent royalties and some practical tips by downloading the white paper “Make or break licensing? Last-to expire Royalty Provisions” by Laura Bantle, Esq here.


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