Intellectual property can be one of the most important financially significant assets for a business or individual. According to a top reporting agency, retail sales of licensed products worldwide exceeded $260 billion in 2014 alone. A license agreement is a legal document used to harness the significant value of acquired intellectual property.
A licensing agreement is a legal document between two parties, known as a licensor and a licensee. A licensor is a party that owns the rights to intellectual property, such as patents, trademarks, copyrights, confidential business information or trade secrets. In a licensing agreement, a licensor will grant to a licensee the rights to produce and sell intellectual property owned by a licensor.
A licensing agreement must be carefully drafted in order to ensure that a party’s rights are adequately protected. When drafting a licensing agreement, a person drafting the agreement must carefully consider several key issues.
For example, a drafter must carefully determine the scope of a party’s intellectual property rights before entering into a relationship. Another consideration is which party will be responsible for paying the costs and fees of maintaining and defending intellectual property if litigation arises. Yet another consideration is whether the agreement is to be exclusive or non-exclusive. Another significant consideration for a trademark licensing agreement is a “care and control provision”. A “care and control provision” is very important for a trademark owner/licensor because a trademark not adequately policed or controlled may be suspect to invalidation by another party. These are only a few of the issues that must be addressed when drafting a licensing agreement.
In addition to law surrounding intellectual property, it is crucial for a person drafting a licensing agreement to have a good technical understanding of the intellectual property itself as well as the business arrangement contemplated by the parties. The attorneys at The Plus IP Firm are engineers and patent attorneys whose practice is focused on intellectual property. The attorneys at The Plus IP Firm have prepared many licensing agreements on behalf of their clients. If you have any questions regarding licensing your intellectual property or the intellectual property of others, please contact one of the attorneys at The Plus IP Firm.