Licensing intellectual property allows businesses to capitalize on the name of other brands in exchange for royalty payments. The owner of the intellectual property is known as the licensor and the business or individual gaining a right to use the intellectual property is known as the licensee. There are many well-known brands and products that utilize licensing as part of their business strategy. For example, t-shirts, shoes, hats, etc. bearing the name of a sports team requires a licensing agreement that explicitly permits the manufacturer to produce these goods with the sports team’s intellectual property emblazoned upon it.
Generally, the licensing agreement places explicit limitations on the license being granted. For example, a license can include allowing a licensee to only use the intellectual property on certain types of merchandise. Other common limitations including restrictions on the geographical territory that the licensee can market or sell its products in, timing limitations, and much more depending upon the licensor’s business model and other licensing agreements. The agreement should also include clear language that include clauses that (1) discuss payment(s), (2) termination of the agreement, and (3) who retains ownership of the intellectual property after the agreement is complete.
These agreements can also provide valuable support to the licensee such as marketing support, optional training, and access to various national campaigns. Providing these services to ensure the success of the licensee can be part of the overall business strategy of the licensor and have the support they need to be successful. Some of these services may be optional for an additional fee while others can be mandatory parts of participating in the business model.
If you’re interested in licensing intellectual property, reach out to the experienced business attorneys at Chase Law Group, P.C. by calling (310) 545-7700 today. We can discuss your business goals and help you design a licensing agreement that explicitly states the understanding between the licensor and licensee.