Difference Between Patent Licensing and Patent Assignment

Patent Licensing and Patent Assignment are two distinct ways of transferring rights related to a patented invention. While both allow others to use the patent, they differ significantly in terms of ownership, control, revenue, and responsibilities.

1. Ownership and Control:
In patent licensing, the patent owner retains full ownership, only granting usage rights to the licensee. The licensee can use the invention but cannot transfer or assign ownership. In contrast, with an assignment, the patent owner fully transfers all rights, including ownership, to the assignee. Once assigned, the assignee has complete control over the patent.

2. Revenue Structure:
Licensing typically generates ongoing income for the patent owner, such as royalty payments. These payments continue for the duration of the license. On the other hand, an assignment results in a lump-sum payment to the patent owner, with no future royalties. The assignee becomes the new owner and benefits from any future profits.

3. Legal Rights:
A key difference is that in an assignment, the assignee has the legal right to sue for patent infringement, as they now hold ownership. However, a licensee, despite having usage rights, does not have the authority to take legal action for patent violations unless specified in the agreement.

4. Risk and Responsibility:
Licensing allows the patent owner to share the risks and responsibilities of commercialization with the licensee. The licensee is responsible for producing and marketing the invention. In contrast, assignment transfers all risks and responsibilities to the assignee, who must manage the technology’s development and market success.