What Is A Licensing Agreement In Business Terms

The overseas company enters into a fixed-term licensing agreement with another company based in the country. The two main reasons for concluding the licensing agreement are: another common element of the licensing agreements includes the party that retains control of copyright, patents or trademarks. Many contracts also contain a provision on territorial rights or distribution in different parts of the country or the world. In addition to the various clauses included in the licensee protection agreements, some licensees may add their own requirements. They may insist on the guarantee that the licensee owns, for example, the property`s property rights, or they may insert a clause prohibiting the licensee from directly competing with the property granted in certain markets. The bargaining power of both parties to a licensing agreement often depends on the nature of the product. For example, a film studio that would grant the image of a popular superhero to an action figure maker could have considerable bargaining power in this negotiation, as the manufacturer will likely benefit from such an agreement. The film studio therefore has the lever to take its business elsewhere if the manufacturer has cold feet. An example of a licensing agreement in the restaurant industry would be that a McDonald`s franchisee has a licensing agreement with McDonald`s Corporation that allows them to use the company`s branded and marketing materials. And toy manufacturers regularly sign licensing agreements with movie studios and give them the legal authority to produce action characters based on popular similarities of movie characters. The end-user licensing agreement threatens information security: a real-life experience, Kaupas, Z., Ceponis, J. (2017).

In The Proceedings of the IVUS International Conference on Information Technology (p. 55-60). This author discusses the information security threats that may result from the end user of the license agreement. This may be due to the fact that some end-users may not be able to ensure the security of information, for example by sharing unwise information with others who are not parties to the agreement. Licensing agreements are often used for the commercialization of technologies. You can authorize the right to manufacture a product from a patent you own or to give someone the right to use one of your trade secrets, as a process developed by your company. The term “licence” has two meanings: one in general terms (for example. B driver`s license) and the other in the economy and commerce. A licence in the broadest sense is “the authorization of an authority to own or use something.” Another important element of a licensing agreement defines the timing of the agreement. Many licensees insist on a strict marketing date for products that are granted to external manufacturers. Finally, it is not in the licensee`s interest to license a company that never markets the product. The licensing agreement also contains provisions relating to the duration of the contract, renewal options and termination terms.

A licensing agreement is a contract between two parties (conedenters and licensees) in which the donor grants the purchaser the right to use the mark, brand, patented technology or the ability to manufacture and sell goods in the licensee`s possession. In other words, a licensing agreement gives the licensee the opportunity to use the licensee`s intellectual property. Licensing agreements are often used by the licensee to market their intellectual property.