Any business that deals with intellectual property- be they copyrights, trademarks, or patents- may need to deal with licensing agreements at some point. However, these types of agreements can be fairly complex, and can easily lead to disputes if not handled with care. But what exactly is a licensing agreement, and why might you need one for your business?
What is a Licensing Agreement?
In simple terms, a licensing agreement is a contract between the owner of an intellectual property (also known simply as IP) and someone who wants to make use of that IP for their own purposes. Intellectual property broadly includes three types of property:
- Trademarks: These are specific phrases or images associated with your company or its brand, including the name of your company and its logo.
- Copyrights: These are specific artistic works that your company owns, such as books, music, movies, music, art, or games, as well as any original part of those works (such as characters or places).
- Patents: These are specific designs for certain inventions, which you have the exclusive right to produce.
What is in a Licensing Agreement?
Every licensing agreement has two parties: the licensor (the owner of the IP) and the licensee (the person who wants a license to use the IP). The agreement lays out exactly what IP the licensee is allowed to make use of, and in what ways they are permitted to use it. They also lay out the rights of the licensor and licensee, and what happens if either side breaks their end of the bargain.
Why Might You Need a Licensing Agreement?
A licensing agreement is commonly used to enable deals between companies that use one company’s IP. For example, in order for a manufacturer to create a product that was patented by someone else, they would need to get a license from the patent holder before they can make it. Likewise, they would need a licensing agreement to legally create products using a particular copyrighted character, or to use a company’s logo or brand on their advertising.
What Should You Do?
The law surrounding licensing agreements can be complicated at the best of times, which is why you need experienced legal counsel to assist you. Thus, you should speak to a lawyer with experience handling business law issues, in order to minimize the risks you may face from a licensing agreement. The sooner you call, the sooner they can get to work for you.
If you have a business law issue, give the Law Office of Andrew Ross Sack a call. Andrew Ross Sack is a New York and New Jersey business lawyer who has considerable experience in handling the many aspects of business law. To schedule a consultation with New York City/Long Island/Westchester business lawyer Andrew Ross Sack, call (516) 526-3319 or visit his contact page.
