In addition to general business and economic considerations, a taker wishes to address certain technical and legal issues to determine the value of a prospective licensing agreement, including the following sub-agreements. In the licensing agreement, as with other types of contracts, there may be sub-agreements. For example, the licensee may require a confidentiality agreement to prevent the licensee from disclosing proprietary product features or processes to others. The taker may require the donor to sign a non-compete agreement to prevent the donor from breaking the agreement by allowing another person to sell the product in the exclusive territory of the taker. Prepare the property first. If you are selling or buying a license for a product, make sure that ownership of that product is clearly stated in the agreement. Also, make sure that no one else uses the asset (z.B. a trademark) and that the trademark is registered or subject to copyright registration. You don`t want to enter into a licensing agreement and find out that someone else is questioning the property. In addition to the details of all parties involved, licensing agreements define in detail how licensed parties can use real estate, including the following parameters: 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. The scope of the licence and the definition of rights and technologies granted are probably the most “essential” provisions of the agreement. The licensee will want to ensure that the license contains all the rights it needs now and in anticipation of future growth to produce and sell the products. The licensee will want to ensure that the scope of the licence is not overly broad (this may result in the involuntary granting of rights to technology or other intellectual property rights that are not necessary to manufacture the products, or a violation of the terms of an existing agreement with a third party). 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. This article is just a general overview of licensing agreements; It is not complete and should not be used to prepare a legal document. Using a model that you find on the Internet is dangerous because it cannot address certain laws and your own situation.
The following are among the most common financial features of a licensing agreement: those who enter into a licensing agreement should consult a lawyer, as there are complexities that are difficult to grasp for those who do not fully understand intellectual property rights.