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Say I am a malicious CEO of Company A which has patented one of our products. At a later point in time, I then publicly give verbal permission to Company B to produce this product. (Permission is not given over any other avenue of communication)

After Company B has made a fortune off of our product, would I be on good grounds for infringement? Does it change if I have given them written permission but not filled out a licensing agreement?

In short, can I use anything besides a licensing agreement to give permission to produce a patented product?

If the answer is different from country to country, then assume we are talking about US law.

  • Did Company B give you anything at all for the permission? – cpast Aug 30 '15 at 5:06
  • Also, what distinction are you making between a license agreement and permission to produce something? – cpast Aug 30 '15 at 5:38
  • @cpast I'm malicious, so they aren't giving me anything, I'm just hoping to trap them. I'm assuming that there is a "standard license agreement" document which is what I'm referring to when I say "licensing agreement" – Nathan Merrill Aug 30 '15 at 12:11
  • Are we assuming that you, as the CEO, had the authority to give said permission? More likely than not, the CEO may be legally unable to unilaterally give such permission. – Viktor Aug 30 '15 at 13:54
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    @Nathan No such standard document exists. A license isn't some special thing with magic words; if you're giving someone permission, that is a license. – cpast Aug 30 '15 at 13:55
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You say the permission was "public", therefore I am going to assume that it cannot be argued that there was no agreement.

There are two possibilities:

  1. If Company B has given consideration for the promise then there is a binding contract and Company A may be able to end it but could not seek redress for when it was in place.
  2. If there is no contract then the principle of promissory estoppel should have essentially the same effect.

An agreement, including an IP licence, does not have to be in writing nor does it have to have any particular form.

  • Interesting. Because our verbal agreement was likely broad and vague (not using specific legal terminology), I imagine I could try to argue in court about what I really meant and obtain redress that way, correct? – Nathan Merrill Aug 30 '15 at 12:16
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    Why do you think an agreement has to use specific legal terminology? There is no doubt the agreement is vague, however, this is likely to work for Company B and against Company A. In the absence of specific terms the court will look to which party has acted in good faith. Your comments tend to suggest that you haven't. I would suggest that you don't make the mistake of thinking that a court will not try to find justice if it is available. Specifically, it is highly likely a court will find the licence was granted unconditionally and irrevocably. – Dale M Aug 30 '15 at 12:31
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    @Nathan Promissory estoppel exists to prevent exactly the sort of thing you're trying to do. It's an equitable doctrine, giving the court broad discretion to determine what the fair thing to do is under the circumstances. Courts are unlikely to show you much sympathy in that matter. If it's a contract case, vague contracts are interpreted in favor of whoever did not write the contract; vagueness makes it easier for Company B. – cpast Aug 30 '15 at 13:54
  • In 2014 Elon Musk put out a press release that said "Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." The title of the document was "All Our Patent Are Belong To You". I think it would be prudent for anyone planning to make use of that assertion to get a license on paper. – George White Mar 12 '18 at 6:56

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