Understanding Non-metered License: Legal Insights and Implications
Definition & Meaning
A non-metered license is a type of agreement that allows a person or company to use a patented invention in exchange for a flat percentage of their sales. Unlike metered licenses, which charge based on actual usage of the patent, non-metered licenses do not consider how much the patent is utilized. This means the licensee pays the same percentage regardless of their level of use. Such agreements can sometimes lead to disputes, as buyers may seek to pay only for the actual use of the patent.
Legal Use & context
Non-metered licenses are primarily used in patent law. They often come into play in business agreements where companies wish to leverage patented technology without tracking usage closely. This type of license can be relevant in various legal contexts, including:
- Intellectual property law
- Commercial contracts
- Business transactions
Users may find that utilizing legal templates from US Legal Forms can help them draft or manage these agreements effectively.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A software company enters into a non-metered license agreement with a technology firm, agreeing to pay 5 percent of its annual sales for the use of a patented algorithm, regardless of how often it uses the algorithm.
Example 2: A manufacturer of consumer goods licenses a patented design under a non-metered agreement, paying a flat rate based on total sales, even if the design is used in only a fraction of their products. (hypothetical example)