Licensing agreements are a solid way to ensure that one’s intellectual property —and certain amounts of income that it generates— is attributed to them while allowing others to use their idea. Two parties enter into a contract where a licensee agrees to produce and sell goods using the copyrighted or trademarked IP so long as it is properly attributed to the licensor. In order for the licensor to grant the licensee the rights, the latter often has to abide by a number of terms and conditions to ensure that the licensor receives their due royalties. Negotiating these terms and conditions can be tricky, but with the help of an experienced trademark and patent lawyer in Tampa, you can set yourself up for success!
The Basics of Licensing Agreements
As an intellectual property rights holder (a licensor), your inventions, patents, trademarks, copyrights, applications, and know-how are incredibly valuable. There are endless opportunities waiting to be had with your ideas, and all you have to decide is how you want to approach them. You can effectively become your own manufacturer, marketer, and distributor, should you have the time, energy, and resources to do so. Many individuals, however, prefer to join forces with a licensee, or a user of the rights who will do the groundwork for you. Many inventors choose to go this path because they prefer to be behind the desk, using their innovation and creativity to brainstorm new brilliant ideas. Others also recognize that their talents lie in research and development as opposed to marketing, selling, and building. The best partnerships are made when two parties bring their skillsets together to create a successful project. However, this is the world of business and entrepreneurship, and you have to be careful where you tread. Before entering into a licensing agreement with someone, you need to make sure your legal bases are covered. You do not want to have gone through all of the hard work, sleepless nights, and endless “back to the drawing board” moments only to be scammed out of the credit (not to mention the profits) you are rightfully due.
What Licensing Agreements Usually Include
In the world of licensing agreements, there are some contracts that are on the simple side that do not require extensive definition, terminology, notation, and other details. Others, however, can be incredibly complex, with hundreds to thousands of pages that include information such as:
- Licensor and licensee information.
- Whereas clause. Not all licensing agreements include these, but most do.
- This includes any applicable terms that need defining to help clarify the document and its meaning.
- Outlining what rights are included and those that are not.
- Territory of use. The geographical locations in which the contract is valid.
- Effective and ending date (if applicable).
- This includes royalty fees, milestones, rates of exchange, currency specifications, equity, license fee, and more.
- Warranties, infringement, and diligence.
- Confidentiality and force majeure.
- Arbitration and termination.
While this list is just a sample of some of the sections that a licensing agreement may include, some contracts may have many more. Working through the clauses and subsections can be time-consuming and confusing. When you have a professional copyright attorney or patent lawyer on your side, you are ensuring that someone with your best interest at heart is making sure you are not missing any essential details. You do not want to miss out on profits due to a missed sentence or a technicality you did not spot while going over the contract, so make sure you have an expert on your side.
Larson Patent Law
When it comes to patents, trademarks, and copyrights, the attorneys at Larson and Larson know what it means to be prepared. We have been assisting Tampa Bay area clients with their legal procurement, licensing, litigation, and prosecution of intellectual property since 1987. We have worked in both domestic and international practice, and our team of paralegals, patent attorneys, and patent agents can make sure that your application and licensing agreements are airtight. For more information about our services, call us today at (727) 546-0660. We look forward to helping you prepare your intellectual property from theft and plagiarism.