Answer ... A patentee may choose to license some or all of its exclusive rights to exploit its patent to one or more parties. Rights can also be licensed on an exclusive or non-exclusive basis. If a party is an exclusive licensee, under statute, it acquires special rights that a non-exclusive licensee does not have, such as the right to sue. See question 6.5 above for a discussion of when a licensee is considered to be an exclusive licensee.

Answer ... Generally, a patentee is free to contract in relation to its patent rights as it sees fit. There are several statutory exceptions to this rule which render certain classes of licence conditions void (Section 144 of the Patents Act 1990 (Cth)). These include where a contract contains a condition that:

• the licensee cannot use the product or process of a third party;
• the licensee must obtain a non-patented product from the patentee; or
• the licensee is limited or prohibited from seeking examination for an innovation patent, which is a prerequisite for enforcement.

Conditions falling under the first or second bullet above are not void if the licensor:

• can prove that the licensee had the option of entering into the licence agreement without the condition; and
• provides for a mechanism whereby the licensee can give three months’ notice and, by paying compensation, be relieved of the obligation.

Additionally, there is a mandatory statutory release from any licence that purports to operate after a patent has expired. Any such licence can be terminated after expiry by the licensee or licensor upon giving three months’ notice, despite any contrary provisions in the licence or any other contract.