What Is A Cross-Licensing Agreement How Do Large Software Companies Use Them

There are a few recognized patent pools, such as MPEG-2, RFID and DVD, that are industry-specific. In the respective patents, each party has rights over different crucial aspects of a particular commercial product. By cross-licensing, these companies or parties retain their freedom to produce the commercial product for sale. And under the terms of the cross-licensing agreement, neither party is responsible for paying monetary policy royalties to the other party. Because of these potential drawbacks, it is considered unwise for a company to add its critical technology patents to cross-licensing agreements. It is possible to add clauses that reduce direct competition between cross-licensing partners. In addition to the general benefits, some cross-licensing contracts are based on an unlicensed state, saving even more money. While the benefits far outweigh the costs, these agreements are legal contracts that companies enter into with their competitors. For this reason, companies considering this type of contract should always consult a qualified lawyer in order to preserve their own interests. Patent litigation cost U.S.

software and hardware companies $29 billion in 2011, according to a study by the Boston University School of Law. While this upsetting figure has been discredited, few seriously doubt the reality that patent application through process campaigns creates a risk for technology users and weighs heavily on the industry. Even smaller estimates put the figure at more than $7 billion. In some sectors, cross-licensing is an important part of all IP management and licensing agreements. For example, according to a recent study by the Toulouse School of Economics, 50% of all licensing agreements in the telecommunications and broadcasting industries are abolished. Cross-licensing contracts create a number of important benefits: what can be wrong with all these cross-licensing benefits? Here are some of the drawbacks that companies considering cross-licensing should take into account: in patent law, a cross-licensing agreement is an agreement under which two or more parties license to operate the claimed object in one or more of the patents. [1] As a general rule, this type of agreement takes place between two parties in order to avoid litigation or to settle infringement proceedings. [2] Very often, the patents held by each party cover different essential aspects of a given commercial product.

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