Cross-License

An agreement between two intellectual property holders, typically of patents, to license one another to use their IP. Frequently cross licenses contain a “balancing fee” where the holder of the stronger IP portfolio receives a net royalty – though the balancing fee can also reflect greater use by one party than the other of the IP. Cross Licenses are frequently negotiated to resolve problems related to blocking patents as well as parallel patents obtained by different entities in the United States, and the rest of the world because one was subject to first-to-invent and the other the first-to-file. See Patent Pool.

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