Patent Licensing has now become an emerging tool to use the technology which is not available in the country. That technology which has been protected by a foreign person in another country can now be used with some formalities only. A patent license is a license granted by the owner which is licensor to a person who wishes to use that license known as licensee. The granted license can also come with conditions of using it in certain parameters and within the limits provided. Patent licensing plays a great role in increasing the economy as well. Without any infringement the technology can be used and also the indigenous technology can be granted in the same way to another country which yields economic benefits like (i) where the license granted is exclusive in nature the licensee already has an advantage over its rivals (ii) the technology can be used directly without investing any money and time in it. There are also some rights and liabilities that are imposed on both licensor and licensee like there are additional charges which are to be decided by the parties, and any new release to be notified to the party also certain terms are included like how the renewal of license and no reverse engineering is to be done. This paper deals with the patent licensing agreement and the clauses covered under it which will be followed by the laws applicable, legal issues between licensor and licensee, and the use of the licensed property. It will further describe important terms and specific provisions related to the agreement and things that are necessary to be considered while drafting the agreement.

Keywords: additional charges, new release, renewal of license, reverse engineering..