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Cross-License Transactions
A cross license is an agreement between two
corporate patent holders to pool/share their patent portfolios.
The objective is usually to prevent expensive infringement
litigation between the parties and to defend against potential
lit igation
from other patent holders.
Typical Technology Sectors
Cross license agreements can take place in any sector,
but most of the
activity takes place in high-tech industries where patent
litigation is a
common and expensive irritation to large corporations.
Typical Organizations
The parties to a cross license arrangement are usually large
multinational high-tech corporations with common interests and
overlapping patent portfolios. Often the cross license will be
part of a
high level strategic alliance. The two parties often share a
common competitor or share an interest in advancing a shared
technology platform or set of industry standards.
Transaction Process
Following the initial introduction of the parties and the
general commitment to collaborate and reduce the threat of
litigation, these transactions can be remarkably simple to
structure. A contractual agreement is drafted that provides each
party with an assurance that it will not become the target of a
patent infringement suit from the other party. Each company is
provided with access to the others' patent portfolio for a range
of purposes, usually including to assert in defense of an
infringement suit from another competitor.
Common Concerns
Anti-trust concerns can become issues where the parties hold
market power and the collaboration could be construed as
restricting competition.
Many corporate cross licensees are also concerned about that happens
to the agreement in the event of a merger and acquisition. When
a cross licensing partner is acquired by a competitor, what
happens to the strategic alliance? If it terminates what
becomes of the confidential information that has been exchanged?
Key Negotiation Points |
When it comes to jointly pooling patents to
defend against others, the parties have to negotiate the rights
to join each other in lawsuits. Whether the joinder is voluntary
or obligatory can be the source of some discussion.
If one of the parties is acquired by a competitor, the
collaborative nature of the relationship could be broken, so
termination arrangements have to be carefully negotiated. |
| Why Tynax? |
With its online exchange, global broker network and extensive database of
licensees, Tynax offers more reach--access to a wider audience of
potential licensees. With thousands of listings, Tynax has more
dealflow and this attracts active buyers and licensees.
The Tynax team is experienced in arranging licensing transactions for
complex technologies. The online Tynax listing and syndication system is
more efficient and provides a faster, more effective process. |
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