While there are many instances of potential licensees soliciting a patentee for a license agreement, it is the licensor who usually initiates the process by sending a “demand letter.”
Once a potential licensee receives the demand letter, the parties may engage in license negotiations with the intention to enter into a license agreement. Alternatively, one of the parties may decide to initiate litigation or the licensor may simply give up.
Note that in some cases the licensee may have the option of initiating litigation by filing a declaratory judgment action. Consequently, demand letters must be carefully worded. In fact, demand letters are usually written by experienced counsel.
There are three types of demand letters, which will be reviewed individually in subsequent blogs. They are:
- An invitation to take a license letter
- A cease-and-desist letter
- An ambiguously worded letter