Who Licenses Out Patents and Why - Business Survey From EU, Japan

Maria Pluvia Zuniga and Dominique Guellec from the Organization for Economic Co-Operation and Development (OECD) have published a working paper titled "Who Licenses Out Patents and Why? Lessons From a Business Survey", which looks at the results of a business survey carried out on the licensing-out of patents. According to the authors, "the goal was to investigate the intensity of licensing to affiliated and non-affiliated companies, its evolution, the characteristics, motivations and obstacles met by companies doing or willing to license."

According to the survey:

• About 20% of European companies and 27% of Japanese companies holding patents license out at least one of their patents to an unaffiliated partner.

• The relationship between size and probability to license out among patent holding companies is U-shaped: the smallest ones and the largest ones are more often involved in licensing out than medium-sized ones.

• The highest proportion of firms license-out in Europe is found in the UK, followed by Nordic countries.

• Earning revenue is the major motivation for licensing out, followed by sharing technology with other companies. “Constrained licensing” (pressuring alleged infringers to take a license) is also important in Europe.

• Cross-licensing out is the second motive for licensing out, both in Europe and in Japan: that shows a role played by patents in technology exchanges between companies.

• About 24% of firms in Europe declare having patents that they would be willing to license out but could not (53% of firms in Japan). The figures are higher within licensing companies and still higher among small firms. The major reason for this failure, according to the European and Japanese surveys, is the difficulty in identifying a partner.

• The use of patents for raising funds is recognised as very important by many European firms, notably for venture capital (11%) and private equity (13%). This rating is much higher for young firms (31% and 40% respectively).

Read/download the paper here (link)