Why Do Companies Use Licensing Agreements

The benefits of licensing can be viewed from two angles: the licensor and the licensee. In business, licensing agreements or agreements are mutually beneficial. Licensor must provide its ownership rights and Licensee must bring expertise in the relevant industry or territory covered by the License. The resulting relationship becomes similar to a joint venture or partnership. License agreements include different types, including copyright licenses, patent licenses, product licenses, trademark licenses, and software licenses. Most often, you will see intellectual property license agreements, electronic patents. B, trademarks and copyrighted material. Common copyrighted materials include music, movies, videos, and works of art. Although a license agreement does not give you ownership of another company`s property, you can use it as long as you follow the parameters described in the agreement. In addition, a company may want to grow and diversify by expanding its product line to absorb excess production or marketing capacity, compensate for seasonal ups and downs, or simply increase profitability with a proven product. Companies may not have the in-house skills, time, or money to develop their own new products, so it can be very attractive to quickly get a proven product through licensing.

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. – What are the rights of companies involved in the performance, broadcasting and production of music recordings? Creating a respectable license agreement sets the initial limits for both the licensor and the licensee. Ultimately, licensors are responsible for enforcing their own license agreements and must pay attention to the licensee`s use of intellectual property (and use by third parties) so as not to wreak havoc in the future. It cannot be stressed enough that licensing agreements are long-term relationships, so both parties must show flexibility and understanding during the negotiation process to reach a fair agreement. Work with an intellectual property professional to review the license agreement and explain in detail which party is responsible for it, reducing the risk of lawsuits and burnt bridges. The expansion of the iPod brand through licensing has allowed many companies to manufacture all kinds of quality products to make the iPod more user-friendly and improve the listening experience.

Examples include the Bose audio system with iPod docking station, products that allow an iPod to be heard through a vehicle`s built-in stereo system, and iPod holding devices that allow users to “take their music with them” while they are running. All these accessories are sold by the licensees. Those entering into a licensing agreement should consult a lawyer as there are complexities that are difficult to understand for those who do not have a thorough understanding of intellectual property law. To protect yourself and your business, it`s important to be thorough when creating a license agreement. Both the licensee and the licensor must have a clear understanding of what they are accepting. Consider the following tips before you begin: There are certainly benefits to licensing your company`s assets, but be sure to consider these factors when creating a license agreement: Typically, a trademark owner grants a license to exploit trademark rights in areas where they don`t have the appropriate expertise. Infrastructure or capital resources to maximize the value of the right. While the licensor exploits trademark law, the licensee bets that the recognition of the name or symbol of ownership will affect consumers and motivate them to purchase a particular item. Among the characters that have enjoyed great popularity due to brand licensing relationships are Mickey Mouse, Barbie, and The Lion King.

A big trend is for manufacturers and retailers to build the core of their business with branded products. Christian, Glynna K. “Joint Ventures: Understanding Licensing Issues.” The License Journal. October 2005. – What are the main contractual arrangements for technology transfer? 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. 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 licensing agreements: An example of a restaurant license agreement would be if a McDonald`s franchisee has a licensing agreement with McDonald`s Corporation that allows them to use the company`s branding and marketing materials. And toy manufacturers regularly sign licensing agreements with movie studios, giving them legal authority to produce figurines based on popular images of movie characters. Another important element of a license agreement sets the company`s schedule.

Many licensors insist on a strict go-to-market date for products licensed to external suppliers. After all, it is not in the best interest of the licensor for a company that never markets the product. The license agreement will also include provisions on the duration of the contract, renewal options, and termination terms. A license agreement is a written agreement that gives you permission to use another party`s property under certain conditions. The two parties to this Agreement are the Licensor (the licensor) and a licensee (the licensor). Licensing to other jurisdictions in Canada or other countries expands your potential while minimizing your risk by deploying companies that already have the necessary manufacturing capabilities and marketing networks. A license agreement is a written agreement between two parties in which one owner allows another party to use that property under a certain set of parameters. A license agreement or license agreement usually involves a licensor and a licensee. License agreements set out the terms under which one party may use another party`s property. While the properties in question may include a variety of elements, including real estate and personal effects, licensing agreements are most often used for intellectual property such as patents and trademarks, as well as copyrights for written materials and visual arts. If someone has a franchise, there may be a license agreement, and there may be several types of licenses within the franchise.

For example, a McDonald`s franchise could include licenses to use the McDonald`s logo on products and packaging, as well as another license to manufacture its patented processes or product ingredients. In addition to detailing all the parties involved, the license agreements detail how the licensed parties are allowed to use the properties, including the following parameters: When a company is considering licensing its intellectual property, there are many considerations to consider. First and foremost, a license is a contract. This is an agreement between the licensor (the person or company that owns the intellectual property) and the licensee (the person or company that wishes to use the intellectual property). The Agreement describes the appropriate intellectual property measures that each party should take and summarizes in more detail the legal measures that may be taken in the event that Licensee infringes The Licensor`s intellectual property. The license agreement is drafted in such a way that an objective third party is able to reasonably interpret and recognize the respective rights and obligations of the contracting parties. 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. Licensing of subsidiaries. The licensee may or may not be granted the right to allow another person to manufacture or sell his products. This depends on the specific terms of the license agreement. Most licensing agreements also address the issue of quality. For example, Licensor may include in the agreement terms that require licensee to provide product prototypes, packaging models, and even occasional samples for the duration of the agreement. .

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