Licensing agreements allow for the licensor granting licensees permission to make, sell and use goods or services under the copyright, trademark and patented procedures and other intellectual property rights of the licensor. This license is granted in return for monetary considerations, which can be a royalty or a flat fee.
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The licensor can sell the license as a product that only has to be purchased once for a flat fee. But the common arrangement is for a licensing agreement with a royalty fee rate specified. The agreement has to be for a specific territory, market or region and it will be valid for a set duration. After that, both parties will have the option of renewing the license.
Sublicensing may be allowed in the agreement based on the size and scope of the original agreement. For example, if the licensor enters into an agreement with a licensee for one state, the licensor may then be able to enter into sublicensing agreements with others for smaller territories, such as single city or county. There will still be concerns such as confidentiality of trade secrets and technology. The licensor will also demand that the licensee maintain certain common standards regarding the product and level of service.
Do you have legal questions regarding licensing agreements and business law? Our business law attorneys can help. Contact a business lawyer in your area today to learn more about how you can receive legal representation regarding licensing agreements and your business.
Did you know?
License agreements include an indemnity clause.
Under this indemnification clause, the licensee is guaranteed protection from any other third-party that claims the licensee has violated their intellectual property rights by using the product being licensed.