Exclusive licenses

It is not uncommon that manufacturers will ask for an exclusive license to a product that they are interested in. In many instances this may be appropriate, especially when the market is so limited that it cannot reasonably be split among two or more companies. Another example is when the company has been investing funds or otherwise providing technical assistance, in accordance with a written agreement, during the course of development of the product at the RR & D Center.

On the other hand, the issuance of an exclusive license should never lead to a company's being able to "smother" a product, either through shelving it or stalling in its introduction to the public (while some other product in which the company has an interest is actively supported), or in overpricing it due to a lack of competition.

Accordingly, the issuance of an exclusive license should be accompanied by some assurance of good faith in bringing the item to market promptly and at a fair price. If at a later date non-performance has been demonstrated, it would then be possible to reassign the license to another firm.

Unless specifically waived, there is an assumption that the Government retains the right to manufacture and use for its own purposes. This right is highly unlikely to be exercised because the government is not in the business of manufacturing products and because such an action runs contrary to the principles of technology transfer and Federal support of the competitive market.

If you anticipate any licensing in connection with a product stemming from your work, meet with the Transfer Officer. He or she will help by drawing up the licensing agreement if that appears to be the best route to take.

Investigator

Transfer Officer

Center Director