Does your company have a fantastic idea for a product, but no ability to manufacture it? Your company could license your idea to a business with the ability to make the product. Licensing is a great way for a company to get its product on the market.
Getting a product on the shelves of big retail stores is difficult. Larger retailers do not typically buy from independent individuals. If you can license your product to an established company, you can work your product into major retailers effortlessly.
A license agreement is a business contract between two parties. A license gives permission from an authority to own or use something. Businesses use licenses to give rights to make, sell, or use something from a company for payment.
Which Products Can Be Licensed?
- Selling a license to a company to make a patented product.
- Selling a license to a company to use a trade secret.
- Digital apps, copyrights, and trademarks are often licensed.
- Sports teams sell trademark licenses to allow companies to create products with their logo and trademark on them.
- Film studios sell licenses to companies so they can create products with characters from certain movies on them.
- Copyright licenses give the right to reproduce and sell copyrighted works.
Tips for Creating a Solid Licensing Agreement
Licensing agreements hold many benefits, but it is essential to ensure you consider these factors when having your attorney draft an agreement for your business.
- Ensure the owner of the product is clearly defined when selling or buying a license for a product.
- Ensure the product is described completely, so there is no misunderstanding about what is being licensed.
- Will there be royalties, who gets paid and when, and what happened if the minimum sales quota is not met?
- If checks will be done on product quality, how often will they be done?
- Can products be discounted?
- What are the government regulations? Are there any restrictions on the licensee.
- Can the product be sold worldwide, in certain countries, or only in the United States.
- Understand all tax laws and how they pertain to your licensing agreement.
- Check all financial statements, credit, and management resumes thoroughly.
What Components are Included in Most Licensing Agreements
Licensing agreements vary based on whether they are for patents, copyrights, or trademarks, but most include these sections.
- A description of the product or trade secret being licensed and may include a patent, trademark number, or copyright.
- The parties are named and identified as the licensor and licensee.
- A description of the license, where it can be used, length of time, and what the licensee can do with the license.
- Details of cost and payment arrangements.
- Details of any restrictions of what the licensee can and can’t do with the license.
- Any non-compete and non-disclosure agreements.
Paul J. Burkhart
Never use online licensing agreement templates. It is wise to hire a business attorney with expertise in constructing and knowing the details of complicated licensing agreements. Paul J. Burkhart can help if you with licensing agreements to help your product get on the market. Paul J. Burkhart is an experienced business attorney who can review your agreement and ensure if has the features you need for your business before you sign on the dotted line.
Our team assists both individuals, and business clients with all their legal needs, including business and Corporate Transactions, Business/Commercial and Civil Litigation, Real Estate, Intellectual Property, Family Law, and Estate Planning matters. We are a full-service private law firm ready to assist you with any request, large or small. Call 561-880-0155 or visit our website.
Law Offices of Paul J Burkhart, PL
800 Village Square Crossing
Palm Beach Gardens, FL 33410
Phone: (561) 880-0155
© Copyright 2019. All Rights Reserved.