It implies no further responsibilities for the initial holder of the right and for the management of the IP title, including the renewal of the registration or monitoring of infringements

Royalties are commonly the preferred form of payment, which adds a layer of uncertainty to future revenues

The initial holder of the right keeps full control over their property 

It often establishes long-term business relations, which may put the initial holder of the right at risk of lower revenues in the case of a new technology entering the market, for instance

It implies loss of control of the IP right. A use by the initial holder of the right would constitute an infringement once the contract is in force, except if certain uses are provided for in the agreement

It provides immediate cash flow return: payments usually take the form of a once-off lump sum payment

It provides to the initial holder of the right to get access to new markets where they have no experience or means to enter

It may enable the initial holder of the right to continue using their property 

It can be unattractive without skilled employees or an established business network of the initial holder of the right 

The contractual party can turn into a competitor