Licensors who have neither the desire nor the ability to identify, advertise, and negotiate with potential licensees (let alone administer a program) may want to enter into a contract with a single licensing agent or a multi-person licensing agency. The benefits of licensing can be viewed from two angles: the licensor and the licensee. If you`re ready to move on with your potential licensee, the decision to hire a licensing agent (along with your IP lawyer) should come next. If your agent is working with you to create a license (more on this below), you should consider your own wishes while anticipating the licensee`s expectations. The definitions, requirements and conditions set out in a licence agreement are crucial points of negotiation. Using a robust brand licensing agreement template like the one we are proposing can help you set the framework for discussions with licensees. 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. As always, there can be downsides to success. Your brand may one day reach TOO many people or generate TOO much activity, resulting in counterfeit attempts by other competitors. By licensing your brand early, you`ll learn how to proactively protect your intellectual property with protections.
Exclusivity is good for the licensor because it eliminates the possibility of being overlooked by a licensee promoting a competing product. It can be good for the licensee and licensors often offer lump sum payments or performance bonuses in exchange for exclusivity, but exclusivity clauses can be difficult. For example, a licensee may end up punishing himself if he concludes an exclusivity agreement without incentive – he will have excluded himself from a contract without compensation. Effectively negotiating a license agreement can be tedious and time-consuming. Again, each agreement is unique, but the negotiation process is mostly the same. All license agreements are unique in context. However, the most effective examples tend to follow a consistent layout. Here are some of the sections, tabs, and headers that should be included in your license agreement: That`s it. The undeniable advantages of building a trademark license agreement. Wherever you intend to run your business, you know you have options for greater brand visibility, long-term growth, and the benefits of working with an authorized partner.
Getting to this first step is easy. Where do you take it? The sky is the limit. Purpose – a complete description of the product or service offered for licensing. This is also the area in which patent, copyright or trademark numbers can be included. When you share your ideas and assets with another company, you are taking a significant risk. So it goes without saying that you should do your research. Work with a licensee who specializes in processing your particular trademark – ideally, you`ll stay in the same industry. Which organization is legally liable if the use, consumption, storage or transport of the product causes damage? For example, who would be responsible for the harm caused to children by a toy made in a foreign country without quality control regulations? A license allows an intellectual property rights holder (the licensor) to earn money from an invention or creative work by charging a user (the licensee) for the manufacture and marketing of the product or service. This is a legal contract in which a third party (the licensee) rents the use of the trademark, name or likeness of another company (the licensor).
The licensee usually acquires the right to use a company`s intellectual property because it has the potential to sell more products than without the brand. While lawyers are indispensable for managing the legal language associated with clauses such as representatives and mandates, as well as compensation and infringement, they are unlikely to be sufficiently familiar with the terms of licensing agreements, including testing protocols, authorized channels, permits, and quality controls, to properly negotiate them on your behalf. A license agreement is a commercial agreement shared by two parties. A licensor who owns the product or trademark; and the licensee who acquires the license with the intention of working with the existing product or trademark. Simply put, it is a contract that allows one company to use another company`s intellectual property. Confidentiality – In addition, a sub-agreement may be proposed to further protect Licensor`s property. This is the NDA – the non-disclosure agreement. This document prevents licensee from sharing or discussing certain details of your product with third parties.
NDAs are quite simple to design and should be considered a mandatory part of your license agreement. Curious about brand licenses? You are not alone. In today`s competitive market, brand licensing is virtually the norm for companies looking to share their products with a wider audience. The benefits are many, whether you`re a large-scale business or just starting out as a local business. If your brand has value, even in a small niche market, licensing may be right for you. It depends on the type of product category and the brand to be licensed. Typically, the licensor`s primary concern is to generate revenue while protecting the brand from anything that could affect it, such as product quality or other concerns about brand relevance. Building brand equity takes years, but only a few days, to destroy it. You own a trademark or intellectual property (IP). You have identified viable licensees for the manufacture and marketing of your products. You are in serious talks with one or more companies.
How do you make sure you negotiate a cheap contract? Think of a licensing partnership as an effective way for both parties to work together when selling to the consumer. The licensor usually has a highly successful brand, but does not manufacture or sell products. Similarly, the licensee manufactures/distributes products, but may not have brand awareness. Together, they can reach a whole new group of customers and share in the profits. Performance or due diligence clauses allow the contract to be terminated or penalties imposed if the licensee does not meet certain requirements. For example, if a licensee does not meet the specified sales targets or does not properly market a product, the licensor may terminate the license. For example, film companies sell licenses to manufacturers, that is, licensees who make clothing, accessories, toys and electronic devices with the image of the characters in their film. Sports teams also sell licenses to companies that manufacture different types of products that include their teams` logos. For companies that have good ideas but limited manufacturing methods at their disposal, licensing is the best way to bring a product to a mass market while offering the greatest potential for return on investment.
And if a licensor enters into an exclusivity agreement to later find a licensee who does a much better job in the same geographic area, they would have anchored themselves with a weak partner. Giving your brand greater reach is not only lucrative in the short term, but also contributes to greater long-term trust from your audience. If your business moves from a small business to a company with greater visibility, your customer base will likely develop an even greater sense of loyalty because they know, after staying with you from the beginning, that your potential for global recognition is high. Some license agreements include a one-time initial license fee. .