What role does licensing play in demonstrating commercial success for patents?

This page is an FAQ based on guidance from the Manual of Patent Examining Procedure. It is provided as guidance, with links to the ground truth sources. This is information only: it is not legal advice.

Licensing can play a significant role in demonstrating commercial success for patents. According to MPEP 716.03(b), “Licensing activities may be relevant to commercial success if there is a proven nexus between the licensing activities and the merits of the claimed invention.”

The MPEP provides several key points regarding licensing as evidence of commercial success:

• The number and nature of the licenses can be indicative of the invention’s value.
• Licenses should be acquired out of a desire to benefit from the invention’s advantages, not to avoid litigation.
• The licensor should provide sales or revenue data from licensees to support the commercial success claim.

The MPEP further states: “Where the offered licensing evidence establishes a prima facie case of nexus, the burden shifts to the examiner to present evidence that the licensing was due to other factors, e.g., a desire to avoid litigation.” This highlights the importance of establishing a clear connection between the licensing and the merits of the invention itself.