IP/C/W/691  
 
23 June 2022  
(22-4874) Page: 1/3 
Council for Trade Related Aspects of Intellectual 
Property Rights  Original: English  
 
 
INTELLECTUAL PROPERTY AND INNOVATION: IP LICENSING OPPORTUNITIES  
COMMUNICATION FROM AUSTRALIA ; CANADA ; THE EUROPEAN UNION ; JAPAN ; SINGAPORE ; 
SWITZERLAND ; HONG KONG, CHINA;  THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, 
PENGHU, KINMEN AND MATSU ; THE UNITED KINGDOM  AND THE UNITED STATES  OF AMERICA  
1  INTRODUCTION  
1.  Organizations rely on intellectual property (IP) assets to protect their products, brands, creations, 
and processes and to create competitive advantages.1 Owners of IP assets, includi ng small and large 
businesses, individual inventors, and artists, can use those assets to yield a broader reach for their 
products and services, and one way to do so is via licensing agreements.2 In licensing IP, permission 
is granted by the owner of the IP right to someone else, the licensee, to use it on agreed terms and 
conditions, for a defined purpose, in a defined territory and for an agreed period of time.3 This differs 
from assignment, which calls for a transfer by a party of all or part of its IP  right to a new owner.4 
While not limited to these scenarios, licensing of IP is often considered in three broad categories: 
technology, publishing and entertainment, and trademark and merchandising5, and can involve all 
types of IP assets, including pat ents, copyright, trademarks, as well as know -how. 
2  LICENSING OF PATENTS  
2.  In licensing a patent, a patent owner can contract with another party, the licensee, to allow the 
licensee to make or sell the invention during the license period.6 Licensing of paten ts is a useful 
option where the patent owner does not have the means to manufacture the product or invention, 
such as in the case of a solo inventor with a viable idea that is lacking the resources necessary for 
production. It can also introduce the invent ion to a bigger market and can therefore be a popular 
option for entrepreneurs and startup companies.7 A number of companies have either shifted away 
from manufacturing products to licensing IP or are established with the objective of creating and 
licensing IP without directly manufacturing any products.8 
3  COPYRIGHT LICENSING  
3.  Copyright protection is provided to the authors of original works of authorship and covers a wide 
range of creative works, including audiovisual works such as movies or TV shows, literary works 
such as books or software, sound recordings, musical works, ph otographs, sculptures, and more.9 
Authors of copyrighted works are granted a bundle of exclusive rights, which can include the rights 
of reproduction, preparation of derivative works, distribution, public display, and public performance 
of certain categor ies of works.10 While the copyright in a work generally vests initially in the person 
who conceives the work and fixes its expression in a tangible medium, i.e., the work 's author, an 
 
1 https://www.financierworldwide.com/generating -revenue -streams -putting -your-intellectual -property -
assets -to-work# .YlAz6pFByUk  
2 https://www.wipo.int/edocs/pubdocs/en/licensing/906/wipo_pub_906.pdf  
3 Id 
4 37 C.F.R. §3.1  
5 https://www.wipo.int/edocs/pubdocs/en/licensing/906/wipo_pub_906.pdf  
6 https://dictionary.cambridge.org/dictionary/english/licence?a=british  
7 https://www.upcounsel.com/patent -licensing?msclkid=95652808c49c11ec801b34c04620f279  
8 https://www.wipo.int/edocs/pubdocs/en/licensing/906/wipo_pub_906.pdf  
9 17 U.S.C. § 102(a)  
10 17 U.S.C. § 104  IP/C/W/691  
 
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  author of a work may gain an economic benefit by granting another person  or entity the authority 
to exercise one or more of these rights on an exclusive or nonexclusive basis.11 Because copyright 
is a bundle of rights that can be divided in many different ways, each of those divisions can create 
licensing opportunities and ser ve as a means for reaching a wider audience. Ownership of a copyright 
may be divided among multiple parties, including both automatically between joint authors of a work 
or otherwise by contract.12 In addition, copyright collective management organizations  (also known 
as collecting societies or CMOs) license use of works on behalf of large numbers of stakeholders, 
collect royalties for those uses, and distribute these royalties back to stakeholders.13 
4  TRADEMARK LICENSING  
4.  In trademark licensing, a trademark owner grants to a licensee permission to use that trademark 
on mutually agreed terms and conditions.14 There are several different ways of licensing trademarks, 
among them franchising, merchandising, brand extension, co -branding, component or ingredient 
branding, and standards.  
5.  Franchising is a specialized license where a franchisee is allowed by the franchisor to use a 
particular business model and is licensed a bundle of IP rights, notably, trademarks, in return for a 
fee.15 Merchandising involves the lic ensing of trademarks to manufacturers of a wide range of 
consumer goods, such as mugs, towels, and apparel, to produce such goods featuring the licensed 
trademarks of owned by third parties.16 In brand extension, a company may use a licensing 
agreement to team up with another business that will use the trademark on a new product.17 In 
co- branding, two or more trademark owners may join together to offer a new product, thereby 
creating new appeal for their current clientele, or to break into a new market.18 Component or 
ingredient branding may involve the right of a manufacturer to use a trademark of another company 
to refer to an ingredient on the packaging or in advertising on the manufacturer 's product.19 The 
reputation of the trademark of the ingredient l ends value and appeal to the manufacturer 's product. 
Further, trademarks of a certifying entity can be licensed for use on products that comply with quality 
or technical standards to convey this information to purchasers and add value to the products of 
authorized users.20 
6.  Each of these methods can provide a number of opportunities for the trademark owner, including 
a broader reach for its product or brand. In turn, the licensee benefits from relying on the goodwill 
established in the trademark or service m ark. 
5  LICENSING OF KNOW -HOW  
7.  "Know -how" can include a range of IP -protected and non -IP protected assets, such as 
unpatented, technical information, trade secrets, data, specifications, procedures, studies, 
processes, or methods in the manufacture, sale or u se of licensed products.21 For instance, the 
licensing of patents for a particular technology can include the know -how associated with that 
technology. Know -how can also be licensed separately from patents, as a distinct form of IP with 
different terms.22 For example, a license for know -how can be for an indefinite term, whereas a 
license for a patent may expire with the patent expiration date.23 
 
11 17 U.S.C. § 201  
12 Id 
13 https://www.wipo.int/edocs/pubdocs/en/wipo_pub_cr_cmotoolkit_2021.pdf  
14 https://www.wipo.int/export/sites/www/sme/en/documents/ pdf/ip_panorama_12_learning_points.pdf 
#:~:text=In%20trademark%20licensing%2C%20a%20trademark%20owner%20%28Licensor%29%20
grants,was%20to%20indicate%20source.%20The%20fact%20that%20a?msclkid=3a8867cbc25e11ec9
0c7498ccaf48978  
15 Id 
16 Id 
17 Id 
18 Id 
19 Id 
20 Id 
21 https://www.acc.com/sites/default/files/program -materials/upload/5.9%20Licensing%20Know -
How%20with%20Patents.pdf?msclkid=75cec8ccc23c11ecac768a08d0782633  
22 Id 
23 Id IP/C/W/691  
 
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  6  GUIDING QUESTIONS FOR DISCUSSION  
8.  In order to facilitate discussion, Members are asked to consider the following questions and share 
their national experiences in the field of opportunities in IP licensing.  
a. What kinds of licensing occurs?  
b. What are some IP licensing best practices that your organizations have employed?  
c. What advice can your organizations share about the benefits of IP licensing?  
d. What are some of the drawbacks to IP licensing your organizations or right holders may 
have experienced?  
e. Are there innovations in IP licensing that organizations or right holders are implementing, 
such as licensing portions of IP assets or fractional ownership?  
f. What are some ways to raise awareness of IP licensing as a tool for revenue generation 
for small businesses, inventors, and artists?  
__________