• It enables followers to learn and catch up faster than they could on their own
  
  
• The managerial costs of licence administration may make selling the IP preferable
  
  
• The strategic disadvantage of teaching competitors can exceed any financial benefits
  

Though there are few disadvantages to licensing out technology the most critical issue in deciding whether to licence out technology is the balance between the financial benefit and the strategic cost. If this is unfavourable it may outweigh any other consideration.

• The balance between the financial benefit and strategic cost of licensing out may vary according to the field, territory and type of licence.
  
  It may be advantageous to grant licences in some fields and with respect to some territories but not others. With the increasing globalisation of business and problem of competition law such divide and rule strategies are more likely to be divisions by field of use than by territory. Licensors may licence out to areas they do not compete in whilst only licensing out old technology in fields they do compete in.
  
  
• The disadvantages of teaching competitors are in any event minimised if the licensor is always several steps ahead of any competing licensees.