A Licensing Agreement with

For a company with a quality product, but without the ability to create it, licensing is a great way to make that product. Essentially, licensing is the best way to get a return on investment and has the best chance of success. 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: Consider other « assumptions ». If you`re working with a lawyer to draft the contract, it`s a good idea to consider circumstances now that might be a problem later. What happens if the licensor goes bankrupt? What happens if the licensee goes bankrupt? What happens if one of the parties is unable to meet its obligations? Can Licensor transfer ownership to another party? What are the penalties for breach (breach) of the contract? License. The license itself is described, with details on the deadlines (one year?), the scope (UNITED STATES, world?) of the license and the assertion of exclusivity. Details of what the licensee can do with the license (manufacture, sell, sublicense, distribute and export products with it, etc.). To facilitate the licensing process, you can use the service of a company or an authorized agent. A licensing expert will help you on issues such as: This article is intended to describe the basic requirements for a successful licensing agreement.

Competent legal and tax advice is required before entering into a license agreement in the United States. Subsidiary licences. The licensee may be granted the right to allow another person to manufacture or sell his products or not. This depends on the specific terms of the license agreement. For examples of confidentiality agreements, material transfer agreements or research cooperation agreements, please visit our Examples of Agreements page. Among the many types of business relationships encountered in the modern world of transactions is the concept of a license agreement, where one party grants another the right to use a right, trade name, method or product, or other asset for mutual purposes in a business context. The natural or legal person granting the right is referred to as the « Licensor ». The natural or legal person who receives the right is referred to as the « Licensee ». Hire a lawyer who has expertise in licensing agreements.

These agreements are complicated and specific to the situation. Many lawyers know how to create a general contract, but they may not know the details of licensing agreements. An IP lawyer could be a good place to start. Licensees and licensors like to be thorough in their agreements to ensure that nothing is overlooked. Both parties need to know what rights they have in relation to this relationship. Licensing agreements cover many factors, including the following: One of the most important elements of a license agreement is the financial agreement. Payments made by Licensee to Licensor are generally made in the form of guaranteed minimum payments and royalties on sales. Royalties generally range from 6% to 10%, depending on the specific property and the licensee`s level of experience and sophistication. Not all licensors need guarantees, although some experts recommend that licensors receive as much compensation as possible in advance. In some cases, licensors use warranties as the basis for renewing a license agreement. If the licensee reaches the minimum turnover, the contract is extended; otherwise, licensor has the option to terminate the relationship.

Knowing how to obtain a license agreement can be very useful if you want to allow other parties to use your intellectual property (IP) for merchandising purposes or purely production-related purposes. Read 3 min This section restricts when and where the licensor can sell their property. It ensures that the licensee may be the only entity that sells that product or service in a particular territory. For example, a Burger King franchisee wants to be the only Burger King in a particular region. Without this deal, the licensor could allow another Burger King franchise to appear next door. Exclusivity and territory. The licensee is granted the exclusive right to manufacture and sell the product in a specific territory. Licensor agrees not to allow anyone to sell the Product in this territory. This part of the agreement is usually associated with a clause.

There are many uses for license agreements. Technology commercialization is common, for example. B if your small business wants to use software in your business operations. The software company may require you to sign a license agreement in order to use its software. Another example is when franchises have licensing agreements with a restaurant`s head office. Licensing allows the franchisee to use the company`s branding and marketing materials. In the case of a subsidiary license, the licensee could be allowed to authorize another entity to use the licensed 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. There are many other methods to consolidate efforts to promote and sell a product or service, ranging from co-ownership of a single company to joint ventures (partnerships of two or more companies) to distribution and distribution agreements. In most cases, a license is the preferred method by a person or company that simply wants to play a completely passive role, namely receiving royalties without being involved in day-to-day or even strategic marketing decisions. As one customer put it, « I just want to sit down and cash my license checks. » A licensor decides on the license fee and the prices are set in stone. For this reason, you need to know what the prices will be and how they are listed in the agreement to avoid confusion.

If you are not clear about the terms of a license agreement, you should hire a lawyer for help. The support you receive will save you money in the long run, so you can accept a license agreement that works in your favor. If you are put off by the idea of royalties, know that all parties will benefit from the agreement. In May 2018, Nestlé and Starbucks entered into a $7.15 billion coffee license agreement. Nestlé (licensee) has agreed to pay $7.15 billion in cash to Starbucks (the Licensor) for the exclusive rights to sell Starbucks products worldwide (single-serving coffee, tea, sachet beans, etc.) through Nestlé`s global distribution network. In addition, Starbucks receives royalties on packaged coffees and teas sold by Nestlé. The license is usually reduced to a written agreement that specifies the rights, obligations, and payments that are part of the license. A license may grant Licensee all rights to exploit the Asset (« Exclusive License ») or only some of the rights or rights of use in connection with other persons (« Non-Exclusive License » or « Limited »). The license normally grants the licensee all the exploitation rights it deems appropriate, but may have certain performance criteria or the license may expire or become non-exclusive. A License Agreement is an agreement between two parties (Licensor and Licensee) in which Licensor grants Licensee the right to use Licensor`s brand name, trademark, patented technology or ability to manufacture and sell goods.

In other words, a license agreement grants the licensee the opportunity to use the licensor`s intellectual property. License agreements are typically used by the licensor to commercialize their intellectual property. Most often, you will see intellectual property licensing agreements such as patents, 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 entity`s property, you can use it as long as you follow the parameters described in the agreement. License agreements ensure that you have legal permission to use another person`s or company`s property. For example, if you use an artist`s song in an advertisement, you`ll need to sign a license agreement to do so legally. .