What are some of the key terms of a licensing agreement?

| Dec 5, 2019 | Licensing, San Francisco Civil Litigation Blog |

Those who are involved in the entertainment and intellectual property industries have to be aggressive about protecting their rights. The world is full of willful wrongdoers and those who are ignorant of the law, which can mean that the rights of individuals and businesses can be infringed upon. This can be quite costly by causing damage to one’s reputation and good will, as well as his or her profits. The best way to protect these rights is to be aggressive on the front end to secure appropriate agreements to both prevent infringement on certain rights and set the stage for a strong legal claim in the event that infringement occurs.

Oftentimes this starts with skillfully negotiating licensing agreements. In basic terms, a licensing agreement is a contract between parties whereby a property owner allows another to use the property subject to certain terms and conditions. There are a number of key terms to a licensing agreement that must be carefully considered. Those who fail to be detailed in their approach to these terms can be taken advantage of by the other party.

Some would say that there are four major terms of a licensing agreement. First, the agreement should specify the geographical region within which the property can be used by the non-owner. Second, the term of the agreement must be clear. The agreement should also state whether the licensing is exclusive or non-exclusive, meaning that other parties can license the property during the same time period. Finally, a licensing agreement should dictate how royalties will be addressed, especially when it comes to a high frequency of use. Oftentimes the property owner will want to negotiate a scaling up so that he or she receives a higher royalty once the property is used a certain number of times.

The terms of a licensing agreement can be crucial to each party’s success. This is why they need to be carefully negotiated with a strategic eye on both immediate and long-term benefits. If you have been considering entering into a licensing agreement, or believe you need to litigate a breach of one of these agreements, then it may be time to discuss it with an attorney of your choosing.

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