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jobs. However, in many of these nations there was not a strong tradition of technology-based industrial development, and local firms were seldom active participants in creating indigenous technology through research and development. Since their research capacity was typically too limited to meet their goals, adopting licensing agreements for foreign technology was an especially attractive option. Manufacturing licensed products generated employment and empowered local industry while reducing dependence on imports. It also avoided the risks inherent in the development of new products by taking advantage of the proven reputation of products which had already achieved success in foreign markets. The economic life of many products, namely in the automotive and defense sectors, have been prolonged by overseas licensed production long after they were considered obsolete in their countries of origin.
244:. Products in high demand on the international market can be reproduced, based on the same or similar design, and branded in ways to make them indistinguishable from the original. When copied and reproduced without a license, certain items are sometimes recopied in a similar manner by a third party. The manufacturers responsible may also grant legitimately registered sub-licenses for their unlicensed products, profiting at the expense of the real intellectual property owner. The quality of unlicensed goods varies greatly; the
85:
automobile manufacturers were the first to adopt this practice, producing a number of specialized
American components for their passenger cars under license. The United States not only supplied European factories with the necessary blueprints and licenses, but also sourced American-made tooling equipment accordingly, which allowed the automobile companies to optimize their production lines. By the 1960s it was not uncommon for an entire specialized industry—such as the manufacture of rotary aircraft in the
208:. Foreign subcontracting occurs when a product's original manufacturer contracts the production of its individual parts and components to a second party overseas. Such arrangements are not considered examples of licensed production because they do not involve the explicit licensing of technological information. Knock-down kits are regarded as a prerequisite to licensed production; they consist of products assembled locally from imported, pre-manufactured parts.
58:
153:
189:, it does not necessarily entail ownership and management of the overseas production by the technology supplier. However, the licensor does retain the right to continue to use the licensed property, and to attribute further licenses to third parties. Occasionally, licensees may themselves sub-license a third party with or without the agreement of the intellectual property owner.
49:, which often approach licensed production as a starting point for indigenous industrial development. While licensed production in developing nations provides stimulus to the production and technical capabilities of local industry, in many cases it remains at least partly dependent on foreign support.
172:
Licensed production is defined as an overseas production arrangement, usually as a direct result of inter-state trade agreements, that permits a foreign government or entity to acquire the technical information to manufacture all or part of an equipment or component patented in the exporting country.
113:
under a French license were not to be exported to other foreign nations without its express approval. Yet another form of common licensing restriction related solely to the licensing activity, regulating whether the specified product was fully produced or partly assembled, and whether entire products
252:
Another method of circumventing the need for a license involves a manufacturer making slight modifications in the design or function of an existing product, before reproducing it. The manufacturer could then argue that the resulting product is not an unlicensed copy, but a new product not subject to
181:
owner and a licensee who is authorized to use such rights under certain conditions. The licensee is manufacturing a product for which it has been granted production rights under specific conditions, while the licensor retains ownership of the intellectual property thereof. In some cases the licensor
256:
Also need to be noted that once the terms of the patent for the particular technology or invention has expired, any manufacturer could legally reverse-engineer and reproduce said technology without needing to negotiate license agreements with former patent holder. However, even after patent terms
132:
began accounting for a significant percentage of licensed production during the late twentieth century. Governments of developing nations often sought to encourage rapid industrialization, reduce dependence on foreign imports, and combat high levels of unemployment by creating and retaining local
125:
In some cases, the original technology supplier did not need to manufacture the product itself—it merely patented a specific design, then sold the actual production rights to multiple clients. This resulted in different companies separately manufacturing identical products licensed from the
228:
Some licensors find it difficult to regulate the quality of their products manufactured under license. It is not always made clear to consumers where exactly a particular good originated, and a poor quality licensed product may damage the reputation of the original licensor. However, this is not
84:
stage of acquiring products with which their own industries were unfamiliar, and refocus on the domestic manufacture of preexisting overseas designs. This allowed for a much higher rate of production, and was considerably cheaper than national sourcing and off-the-shelf acquisition. European
200:
derived from a share of the licensee's revenue. The licenses can be terminated by the licensor, or may expire after a set date; however, the technology and knowledge, once transferred, cannot be rescinded, so even if the licensing agreement expires they remain in the licensee's possession.
248:
has noted that while licensing companies often provide quality control measures, and there is some incentive for licensees to comply or risk legal action and the ensuing damage to their own profit, manufacturers who engage in unlicensed production are under no such obligations.
92:
A number of countries began making improvements to foreign products manufactured under license, and were even able to re-export them successfully. This trend resulted in some technology suppliers imposing additional conditions on the licensee. The United States began inserting
37:
of technology developed elsewhere. The licensee provides the licensor of a specific product with legal production rights, technical information, process technology, and any other proprietary components that cannot be sourced by the licensor.
126:
same licensee. For many licensee companies, licensed production by other firms provides a continuous outlet for their proprietary technology, increasing their return on investment and prolonging the economic life of the product.
257:
have lapsed some manufacturers do opt for licensed production, since such agreements also confer transfer of full manufacturing plans and expertise which may prove to be cheaper than acquiring those via reverse engineering.
101:, which required the free sharing of any improvements made to American technology. Other attempts were also made to control the destination of licensed products, particularly with regards to the
632:
80:
During the 1920s, European economists began advocating licensed production of foreign goods as the cure for "industrial particularism"—it allowed countries to bypass the costly
900:
144:
which built important segments of their industry on licensed production have now themselves become licensors of technology and products to less developed states.
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114:
or their individual components were manufactured. The governments of
Germany and Switzerland imposed similar restrictions on military vehicles manufactured in
65:
The four most common applications of licensed production have historically been automotive engines and parts, weaponry, aircraft, and pharmaceuticals. During
61:
An example of global licensing agreements: national governments which have purchased foreign licenses to manufacture arms and ammunition are depicted in blue.
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Licensing agreements determine the form and scope of compensation to the intellectual property owner, which usually takes the form of a flat
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Unlicensed production is the utilization of foreign manufacturing technology without a license, achieved through
69:, it was more common for licensing agreements to take place between companies in the same country; for example,
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879:"Political relations between Portugal and South Africa from the end of the second World War until 1974"
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Working for the Enemy: Ford, General Motors, and Forced Labor in
Germany during the Second World War
482:
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Relations between South Africa and France with special reference to military matters, 1960-1990
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Two related commercial practices are foreign subcontractor production and the proliferation of
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will supply the necessary technical data, prototypes, and/or machine tools to the licensee.
881:. Johannesburg: University of Witwatersrand. Archived from the original on 28 February 2015
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Troubled
Partnership: A History of U.S.-Japan Collaboration on the Fs-X Fighter
532:. Santa Barbara: Praeger Security International (ABC-CLIO). pp. 313–315.
280:
17:
424:
141:
115:
700:
Billstein, Reinhold; Fings, Karola; Kugler, Anita; Levis, Nicholas (2009).
1047:
Encyclopedia of the
Vietnam War: A Political, Social, and Military History
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The Modern
Defense Industry: Political, Economic, and Technological Issues
445:
157:
137:
42:
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considered a form of consumer fraud unless the product is unlicensed or
395:
289:
270:
34:
633:"Multiplying the Sources: Licensed and Unlicensed Military Production"
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Byrd, William (2010). "8". In Loayza, Norman; Keefer, Philip (eds.).
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Croft, Stuart; Dorman, Andrew; Rees, Wyn; Uttley, Matthew (2001).
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Industrial products which have been built under license include:
411:
helicopter, produced under license in
Germany, Japan, and Italy.
185:
While licensed production is often dependent on the appropriate
70:
89:—to be dependent wholly on foreign-licensed components.
761:
Innocent
Bystanders: Developing Countries and the War on Drugs
74:
1022:
India's Ad Hoc
Arsenal: Direction Or Drift in Defence Policy?
381:
aircraft, produced under license in the United States as the
1158:. The Hague: Martinus Nijhoff Publishers. pp. 322–342.
1156:
East
European Transport Regions and Modes: Systems and Modes
356:
multirole fighter aircraft, produced under license in India.
1126:
Moukambi, Victor (December 2008). Grundlingh, A.M. (ed.).
27:
Production under license of technology developed elsewhere
856:. New Brunswick: Transaction Publishers. pp. 27–28.
793:. Abingdon-on-Thames: Routledge Books. pp. 118–120.
738:. Abingdon-on-Thames: Routledge Books. pp. 245–236.
1105:. Ann Arbor: University of Michigan Press. p. 208.
824:
Embargo Disimplemented: South Africa's Military Industry
955:. Abingdon-on-Thames: Routledge Books. pp. 17–21.
365:
multirole fighter aircraft, produced under license in
77:-designed aircraft engines for the German war effort.
1024:. Oxford: Oxford University Press. pp. 157–159.
791:
Britain and Defence 1945-2000: A Policy Re-evaluation
1103:
Pushing the Envelope: The American Aircraft Industry
177:(WIPO), it must constitute a partnership between an
1073:
Helicopters: An Illustrated History of Their Impact
1049:. Oxford: Oxford University Press. pp. 17–18.
923:. Basingstoke: Palgrave-Macmillan. pp. 66–67.
827:(1989 ed.). Oxford University Press. pp.
763:. Washington DC: The World Bank. pp. 330–331.
566:. Westport: Praeger Publishers. pp. 116–119.
109:stipulated that military vehicles manufactured in
921:Arming Conflict: The Proliferation of Small Arms
899:: CS1 maint: bot: original URL status unknown (
877:Correia, Paulo (2007). Verhoef, Grietjie (ed.).
423:, produced under license in South Africa as the
1132:(Thesis). Stellenbosch: Stellenbosch University
736:Export-Import Theory, Practices, and Procedures
468:sedan, produced under license in Poland as the
299:, produced under license in eighteen countries.
1076:. Santa Barbara: ABC-CLIO Publishers. p.
564:Defense Industries in Latin American Countries
283:, produced under license in fifteen countries.
97:statements into licensing agreements known as
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327:trainer aircraft, produced under license in
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212:Quality control and unlicensed production
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704:. New York: Berghahn Books. p. 64.
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246:United Nations Office on Drugs and Crime
175:World Intellectual Property Organization
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562:Maldifassi, Jose; Abetti, Pier (1994).
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314:, produced under license in Australia,
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394:helicopter, produced under license in
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343:aircraft, produced under license in
953:Towards a Brave New Arms Industry?
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73:was granted a license to produce
41:This is an especially prominent
160:manufactured under license in
1:
821:Landgren, Signe (June 1989).
1185:Production and manufacturing
1154:Mieczkowski, Bogdan (1980).
218:Public domain § Patents
951:Bitzinger, Richard (2003).
528:Bitzinger, Richard (2009).
136:Developing nations such as
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224:Counterfeit consumer goods
221:
215:
1210:Intellectual property law
1101:Pattillo, Donald (2000).
1070:McGowen, Stanley (2005).
392:Aérospatiale Alouette III
1045:Tucker, Spencer (2001).
82:research and development
33:is the production under
354:Mikoyan-Gurevich MiG-21
1220:Management cybernetics
991:. 2010. Archived from
982:"Counterfeit products"
734:Seyoum, Belay (2008).
642:. 2007. Archived from
169:
62:
1195:Development economics
1020:Smith, Chris (1994).
919:Bourne, Mike (2007).
852:Lorell, Mark (2009).
671:. Armstrade.sipri.org
363:General Dynamics F-16
179:intellectual property
155:
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383:Martin B-57 Canberra
238:industrial espionage
187:technology transfers
1215:Technology transfer
1200:International trade
998:on 23 December 2016
649:on 23 December 2016
483:Import substitution
242:reverse engineering
31:Licensed production
409:Bell UH-1 Iroquois
297:Heckler & Koch
170:
130:Developing nations
63:
47:developing nations
1205:Industrial policy
1165:978-94-009-8901-6
863:978-1-56000-891-0
838:978-0-19-829127-5
669:"Trade Registers"
640:Small Arms Survey
498:Badge engineering
318:and South Africa.
173:According to the
148:Theoretical basis
105:. For instance,
16:(Redirected from
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444:The Italian
402:, and India.
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367:South Korea
352:The Soviet
231:counterfeit
166:Polski Fiat
67:World War I
1179:Categories
675:2015-11-03
638:. Geneva:
509:References
281:FN Herstal
222:See also:
216:See also:
43:commercial
1190:Licensing
503:Upscaling
425:Eland Mk7
253:license.
142:Singapore
116:Argentina
95:pro forma
895:cite web
477:See also
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376:Canberra
261:Examples
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138:Pakistan
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162:Poland
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329:India
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