A checklist that helps negotiate a license agreement, not to mention the preparation and the written agreement itself, may seem like a simplified tool for an experienced negotiator or contract lawyer. After all, most people in such positions are well educated and accustomed to dealing with several projects that have many details in the scientific, legal and commercial field at the same time. If they did not have the necessary competence to deal with this type of work situation, they would not last long in the active and high-pressure environment of licenses. But precisely because of the countless details, a checklist for the work licensing agent or lawyer can save lives (or save business). Since most people involved in closing deals are involved in multiple deals at the same time, important aspects can be forgotten or overlooked at any time and for any transaction. One of the easiest ways to ensure that a crucial or costly mistake does not occur due to an oversight is to use a tool like the checklist presented here. Christian, Glynna K. “Joint Ventures: Understanding Licensing Issues.” The License Journal. October 2005. This section presents and explains the different elements of the checklist for licensors and licensees. If your work requires you to design license agreements, download the checklist from the online version of this guide, where it will be given without the annotations.
Ensure that certain standard exceptions to confidentiality obligations apply, the most common being information that: was already known, public (through no fault of), properly disclosed by third parties, developed independently, or required by law or court. Consider both a delay (for example. B 5 years) and, unless you disclose critical data to Licensor, a “residual” clause (which exempts from these confidentiality obligations information learned by employees and stored in memory without assistance). – What are the main elements of a license agreement? What are the most important points to consider when negotiating a license agreement? When a company is considering licensing its intellectual property, there are many considerations to consider. First and foremost, a license is a contract. This is an agreement between the licensor (the person or company that owns the intellectual property) and the licensee (the person or company that wishes to use the intellectual property). The Agreement describes the appropriate steps that each party should take with respect to intellectual property and summarizes in more detail the type of legal action that could be brought if Licensee infringes Licensor`s intellectual property. The license agreement is drafted in such a way that an objective third party is able to reasonably interpret and recognize the respective rights and obligations of the contracting parties. Licensee should have the right to disclose or make available the Software not only to its employees and agents, but also to independent contractors engaged by Licensee, as well as consultants and possibly directors, investors and acquirers (each subject to confidentiality). Sometimes disclosure must be made to the licensee`s accountants and, in the case of banks, its auditors and regulators. Ideally, Licensee`s obligation of confidentiality is limited to informing such persons that disclosure is confidential or, at most, requiring such persons to respect confidentiality (without necessarily having to obtain agreements signed by all). If possible, avoid being expressly liable for breaches of privacy by third parties (in particular supervisory authorities and professionals) with whom you are allowed to share information.
Today, we live in a very global and interdependent economy. If a client`s business takes them across borders, my legal advice can follow, as I have a recognized specialization in international commercial law and contract contracts. I excel among my colleagues in drafting, revising and negotiating agreements between two parts of different countries. This creates new opportunities for my clients to benefit and grow. Your only limitation is your service in the field. Most licensing agreements also address the issue of quality. For example, Licensor may include terms in the Agreement that require Licensee to provide prototypes of the Product, packaging models, and even occasional samples throughout the term of the Agreement. Of course, the best form of quality control is usually achieved before the fact – through a careful check of the licensee`s reputation. Another common quality regulation in licensing agreements concerns the procedure for disposing of unsold goods. If the items that remain in the inventory are sold as cheap imitations, it can damage the licensor`s reputation in the market.
Examples of licensing can be found in many different industries. An example of a license agreement is an agreement between software copyright holders and a company that allows them to use the computer software for their day-to-day business operations. Licensing agreements are often used for the commercialization of technologies. In some cases, one or all parties do not want their name to be used in connection with licensed products that are advertised or sold, as this may indicate that the licensing institution is recommending those products. If this is the case, this should be stated in the agreement. Another important element of a licensing agreement sets the timing of the agreement. Many licensors insist on a strict go-to-market date for products licensed to external suppliers. After all, it is not in the best interest of the licensor for a company that never markets the product. The license agreement also includes provisions on the duration of the contract, renewal options, and termination terms. Those entering into a licensing agreement should consult a lawyer as there are complexities that are difficult to grasp for those who do not have a thorough understanding of intellectual property law.
The bargaining power of both parties to a licensing agreement often depends on the type of product. For example, a film studio that licenses the likeness of a popular superhero to an action figure creator could have significant bargaining power in this negotiation, as the manufacturer is likely to benefit enormously from such an agreement. The film studio therefore has the leverage to take its business elsewhere if the manufacturer is cold on its feet. Another common element of licensing agreements is the party that retains control of copyrights, patents or trademarks. Many contracts also include a provision on territorial rights or on the person who manages distribution in different parts of the country or the world. In addition to the various clauses inserted in the agreements to protect the licensor, some licensees may add their own requirements. For example, they may require a guarantee that the licensor owns the rights to the property, or they may include a clause prohibiting the licensor from competing directly with the property granted in certain markets. An example of a restaurant license agreement would be if a McDonald`s franchisee has a licensing agreement with McDonald`s Corporation that allows them to use the company`s branding and marketing materials. And toy manufacturers regularly sign licensing agreements with movie studios, giving them legal authority to produce figurines based on the popular similarities of movie characters. Because of the legal basis they must cover, some licensing agreements are quite long and complex documents. But most of these agreements cover the same fundamental points.
These include the scope of the agreement, including exclusivity or territorial restrictions; financial aspects, including required advances, royalty rates and how royalties are calculated; guarantees for minimum sales; Schedules with marketing dates, contract duration and renewal options; the rights of the lessor to monitoring and quality control, including the procedures to be followed; the minimum stocks to be retained; finally, returns and allowances. .