What Is the Meaning of Licensing Agreement

Establish the property first. If you sell or purchase a license for a product, make sure that ownership of that product is clearly stated in the agreement. Also, make sure that no one else is using the asset (for example. B, a trademark) and register the trademark or register it for copyright. You don`t want to get into a license agreement and then find out that someone else is questioning the property. Sub-agreements. In the license agreement, as with other types of contracts, there may be sub-agreements. For example, Licensor may require a non-disclosure agreement to prevent Licensee from disclosing proprietary product features or processes to third parties. Licensee may require Licensor to sign a non-compete clause to prevent Licensor from breaching the Agreement by allowing someone else to sell the Product in Licensee`s exclusive territory. When a party licenses something, they want to make sure it`s being used in the right way. This section of the Agreement describes how Licensee will ensure that this happens. This may include regular quality assurance checks or give Licensor the right to monitor sales. Christian, Glynna K.

„Joint Ventures: Understanding Licensing Issues.” The License Journal. October 2005. Each license agreement is unique and these agreements vary depending on the type (copyright, trademark, patent, etc.). In general, you will find these sections in most license agreements: a well-written license agreement is important for licensees and licensors. If your business needs help at any point in the process, our team of contract lawyers can help. Whether it`s writing the entire agreement or reading your own template, we have the expertise to make sure it`s done right. Most licensing agreements also address the issue of quality. For example, Licensor may include terms in the Agreement that require Licensee to provide prototypes of the Product, packaging models, and even occasional samples throughout the term of the Agreement. Of course, the best form of quality control is usually obtained before the fact – by carefully checking the reputation of the licensee. Another common provision on quality in licensing agreements concerns the procedure for disposing of unsold goods. If the items that remain in stock are sold as cheap imitations, it can damage the licensor`s reputation in the market. A license agreement is a commercial agreement between two parties.

The licensor (the seller of the license) owns the assets to be licensed and the licensee (the buyer) pays for the right to use the license. Licensee shall pay royalties to the Owner in exchange for the right to sell the Product or use the Technology. For a company that has a great product but has no way to make it, licensing is a great way to bring that product to market. The entrepreneur says that among the potential ways to commercialize a product, licensing „offers the greatest potential return on investment and has the greatest chance of success.” Another common element of licensing agreements is which party retains control over copyrights, patents or trademarks. Many treaties also include a provision on territorial rights or who manages distribution in different parts of the country or world. In addition to the various clauses inserted in the agreements to protect the licensor, some licensees may add their own requirements. For example, they may require a guarantee that the licensor owns the rights to the property, or they may include a clause prohibiting the licensor from competing directly with the property granted in certain markets. The benefits of licensing can be viewed from two angles: the licensor and the licensee. The term license implies to allow by granting powers. Therefore, a license agreement is a contract between two parties – namely the licensor and the licensee. This is usually a written contract in which the owner allows the licensee to use their property for a certain period of time. The licensor usually receives money to serve in return by allowing access to their property.

License agreements are usually signed to secure intangible properties, such as patents, copyrights, trademarks to protect technological innovations, company names, logos, and others. In the event of an extreme license agreement, Licensor gives Licensee flexibility to manufacture and sell products, use its brand name, or use Licensor`s patented technological know-how. The granting of a subsidiary licence could allow the licensee to authorize another undertaking to use the authorised work. For example, if you are a movie producer and you license a song, you may still need to get permission to allow another entity to use the section of your movie where the song is played. Because of the legal basis they must cover, some licensing agreements are quite long and complex documents. But most of these agreements cover the same fundamental points. This includes the scope of the agreement, including exclusivity or territorial restrictions; financial aspects, including required advances, royalties and how royalties are calculated; guarantees of minimum turnover; Schedules with „To Market” dates, contract duration and renewal options; the landlord`s supervisory and quality control rights, including procedures to be followed; the minimum stocks to be retained; Finally, returns and indemnities. .