Exclusive or non-exclusive: what a startup should ask for when licensing IP
Exclusivity costs more, but it is often the only thing that makes a licensed technology worth building a company on. Here is how to decide, and how to negotiate it.
If you are building a product on someone else's patent, the first question is whether anyone else can build on it too. A non-exclusive licence is cheaper, but it gives your competitors the same starting point.
Exclusivity does not have to be all-or-nothing. You can ask for it in one field of use, such as agriculture but not pharma, or one territory, such as India and South Asia. Owners are often more open to narrow exclusivity because they can still license the rest.
Expect the owner to ask for something back: a higher upfront fee, a minimum annual royalty, or development milestones. If you miss the milestones, the licence may become non-exclusive. That is fair, and it keeps both sides honest.
Before you sign, check the chain of title. Make sure every inventor has assigned their rights to the institution, and that the licence will be registered with the Controller of Patents under Section 69. An exclusive licence you cannot enforce is not worth much.