Licensing Agreement

A Licensing Agreement is a commercial contract between a Licensor (property owner) and a Licensee that focuses on granting License Rights to a Licensed Property, allowing the licensee to use some portion of the property under specified terms and conditions.

• AKA: License Contract.
• Context:
  • It can range from being an Exclusive Licensing Agreement to being a Sole Licensing Agreement to being a Non-Exclusive Licensing Agreement.
  • It can range from being a Non-Negotiated License Agreement to being a Negotiated License Agreement.
  • ...
  • It can support a Licensing-Based Business Model.
  • It can encompass various components, including the License Term, Territory, Renewal Provisions, and other vital limitations.
  • It can vary based on the type of licensed property, including Copyright, Patent, Trademark, and other forms of intellectual property.
  • It can be essential in protecting Intellectual Property Rights.
  • It can outline the Scope of License detailing what the license covers, including specific products, services, or intellectual property.
  • It can specify the License Duration or term of the license, indicating how long the licensee can use the licensed material.
  • It can include License Payment Terms that detail the fees, royalties, or other payments required for the license.
  • It can define Geographical Restrictions that limit where the licensee can use, modify, or distribute the licensed material.
  • It can include Usage Rights and Usage Restrictions, specifying what the licensee is permitted and not permitted to do with the licensed material.
  • It can outline the Responsibilities of the Licensor and Responsibilities of the Licensee, detailing each party's obligations.
  • It can include clauses on License Termination, describing the conditions under which the agreement can be terminated by either party.
  • It can specify Dispute Resolution Mechanisms, detailing how any conflicts between the parties will be resolved.
  • It can include provisions for License Renewal and License Amendments, explaining how the agreement can be renewed or modified.
  • It can be critical in business collaboration, technology transfer, and market expansion.
  • ...
• Example(s):
  • a Software Licensing Agreement, with Software Usage Rights and Software Usage Restrictions.
  • a Patent Licensing Agreement, permitting the use of a patented invention or technology.
  • a Trademark Licensing Agreement, authorizing the use of a specific brand or logo.
  • a Franchise Agreement, where a franchisor licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee.
  • a Media Licensing Agreement, granting rights to use footage, photographs, or other media content.
  • a Publishing Licensing Agreement, allowing a publisher to produce and sell copies of an author's work.
  • ...
• Counter-Example(s):
  • a Non-Disclosure Agreement, which focuses on protecting confidential information rather than granting usage rights.
  • a Sales Agreement, which involves the transfer of ownership of goods rather than the licensing of usage rights.
• See: Terms of Service Agreement, Lease, Copyright Infringement, Intellectual Property, Patent, Intellectual Property Infringement, Scope of License, Duration, Payment Terms, Geographical Restrictions, Usage Rights, Responsibilities of the Licensor, Responsibilities of the Licensee, Termination, Dispute Resolution, Renewal, Amendments

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References

2023

• (Wikipedia, 2023) ⇒ https://en.wikipedia.org/wiki/license Retrieved:2023-8-7.
  • A license (US) or licence (Commonwealth) is an official permission or permit to do, use, or own something (as well as the document of that permission or permit).

    A license is granted by a party (licensor) to another party (licensee) as an element of an agreement between those parties. In the case of a license issued by a government, the license is obtained by applying for it. In the case of a private party, it is by a specific agreement, usually in writing (such as a lease or other contract). The simplest definition is "A license is a promise not to sue," because a license usually either permits the licensed party to engage in an activity which is illegal, and subject to prosecution, without the license (e.g. fishing, driving an automobile, or operating a broadcast radio or television station), or it permits the licensed party to do something that would violate the rights of the licensing party (e.g. make copies of a copyrighted work), which, without the license, the licensed party could be sued, civilly, criminally, or both.

    In particular, a license may be issued by authorities, to allow an activity that would otherwise be forbidden. It may require paying a fee or proving a capability (or both). The requirement may also serve to keep the authorities informed on a type of activity, and to give them the opportunity to set conditions and limitations.

    A licensor may grant a license under intellectual property laws to authorize a use (such as copying software or using a patented invention) to a licensee, sparing the licensee from a claim of infringement brought by the licensor. A license under intellectual property commonly has several components beyond the grant itself, including a term, territory, renewal provisions, and other limitations deemed vital to the licensor. Term: many licenses are valid for a particular length of time. This protects the licensor should the value of the license increase, or market conditions change. It also preserves enforceability by ensuring that no license extends beyond the term of the agreement. Territory: a license may stipulate what territory the rights pertain to. For example, a license with a territory limited to "North America" (Mexico/United States/Canada) would not permit a licensee any protection from actions for use in Japan. Again, a shorthand definition of license is "a promise by the licensor not to sue the licensee". That means without a license any use or exploitation of intellectual property by a third party would amount to copying or infringement. Such copying would be improper and could, by using the legal system, be stopped if the intellectual property owner wanted to do so.

    Intellectual property licensing plays a major role in business, academia and broadcasting. Business practices such as franchising, technology transfer, publication and character merchandising entirely depend on the licensing of intellectual property. Land licensing (proprietary licensing) and IP licensing.

2022

• (Investopedia, 2022) ⇒ https://www.investopedia.com/terms/l/licensing-agreement.asp
  • QUOTE: The term licensing agreement refers to a legal, written contract between two parties wherein the property owner gives permission to another party to use their brand, patent, or trademark. The agreement, which is set between the licensor (the property owner) and the licensee (the permitted party), contains details on the type of licensing agreement, the terms of usage, and how the licensor is to be compensated. Contract types vary based on what is being licensed. Licensing agreements also alleviate any disputes related to sales, issues of quality, and royalties.
  • Key Takeaways
    • A licensing agreement allows one party (the licensee) to use and/or earn revenue from the property of the owner (the licensor).
    • Licensing agreements generate revenues, called royalties, earned by a company for allowing its copyrighted or patented material to be used by another company.
    • Some examples of things that may be licensed include songs, sports team logos, intellectual property, software, and technology.
    • Licensing agreements allow parties to control property and enter new markets without having to spend the money to do so.
    • Drawbacks of these deals include establishing a relationship with the wrong company and the possibility of losing a company's reputation.
  • Understanding Licensing Agreements
    • Licensing agreements delineate the terms under which one party may use property that is owned by another party. While the properties in question can include a myriad of items, including real estate holdings and personal possessions, licensing agreements are most often used for intellectual property, such as patents and trademarks, as well as copyrights for written materials and visual art.

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