(1) An export or import license is an authorization given by a competent state body to carry out foreign trade transactions. Issuing licenses is one of the forms of state control of trade export and import, as well as of foreign exchange. In the capitalist countries the issuing of licenses is used as a way to limit (or completely prohibit) trade with particular countries or groups of countries, protect domestic industry against foreign competition, control the expenditure of foreign exchange, and supplement budget incomes by imposing license charges for issuing the authorization to export and import. In the developing countries the issuing of licenses is used above all to protect the domestic economy from foreign monopolies.

In the socialist countries the issuing of licenses is one form of implementing the state’s monopolies on foreign trade. Licenses are issued by the ministries in charge of foreign trade (in the USSR, the Ministry of Foreign Trade).

(2) An authorization to use an invention or other technical advance, given on the basis of a license agreement or a legal or administrative decision by a competent governmental body, is also known as a license. Ordinarily licenses are issued for an invention that has been patented or for which a patent application has been made. So-called patentless licenses are issued for achievements (including production secrets) that cannot, according to the law of the particular country, be protected by patent or for inventions for which the application to receive a protective document has not been submitted for some reason. The cost for a patent license is usually higher than for a patentless one.

There are three principal types of licenses: simple, exclusive, and full. With a simple license the licenser (holder of the patent) gives the licensee the right to use the invention within the limits established by the agreement, while retaining the right to use it in the same territory and also to grant it to an unlimited range of persons under the same conditions (the licensee does not have the right to issue sublicenses). Under an exclusive license contract, an exclusive right to use the invention within the limits established by the agreement is granted, with the patent holder renouncing his right to use it independently in this territory or to give it to other people. With a full license the holder gives the licensee the right to use all rights based on the patent during the effective period of the patent (this form of license is used comparatively rarely).

On the basis and in the manner established by law, a court or governmental body may, on application by an interested person, establish a mandatory license; that is, it may authorize the use of a patented invention under conditions determined by the body. Such a license is ordinarily issued where the invention is not being used or is used inadequately (from the viewpoint of state interests).

In addition, a mandatory license may be granted if state defense is involved or in cases where an invention is particularly important for the state but no agreement has been reached with the patent holder on issuing licenses. For example, according to Article 112 of the Basic Principles of Civil Legislation of the USSR, such licenses may be given if the Council of Ministers of the USSR so decides.