Intellectual Property Licensing Agreements FAQ
What are Intellectual Property Licensing Agreements?
Intellectual Property Licensing Agreements are exactly what they sound like – they are contracts between two or more parties that allow for the rights to use, sell, or perform intellectual property that is otherwise protected by federal law. These licensing agreements can extend to virtually any form of property, from art and literature to merchandising rights and musical compositions.
The two parties signing an Intellectual Property Licensing Agreement receive consideration – important in contract law (see the question “when are Intellectual Property Licensing Agreements valid?” below) – and both stand to benefit from a mutual exchange of value. From the “Licensor’s” perspective, they stand to make a portion of profits without handling the work. From the “Licensee’s” perspective, they stand to gain profit from using original work that already exists. Although the motivation for licensing does not always center on profits, it is this mutual consideration that is vital to many of these licensing agreements.
What are the roles in an Intellectual Property Licensing Agreement?
As you saw in the question above, there are two roles: the Licensor and the Licensee. Because the two roles sound so similar, it’s worth defining each role.
The Licensor is the possessor and owner of the copyrighted material or other type of intellectual property in question. Because they own the material, they have the licensing rights, which grants them the ability to enter into these intellectual property licensing negotiations.
The Licensee is the party that is seeking to use the copyrighted or otherwise protected intellectual property in some fashion, usually standing to make a profit. For instance, a musical work can be licensed out by the original artist for inclusion on a compilation set for a share of the profits; this kind of arrangement is actually quite common and is a continuing source of revenue for many musical artists.
What types of Intellectual Property Licensing Agreements are there?
There are a number of different forms for use as it relates to intellectual property licensing. It’s worth taking a brief look at a few examples in order to be familiar with these forms:
- Copyright License Agreements: These agreements can apply to a whole range of copyrighted material, which is why it’s important to actually get a specific type of copyright agreement. For example, there are Copyright License Agreements specifically tailored to artwork or photographic work. Using the right kind of agreement is important in ensuring a smooth agreement and business relationship.
- Domain Name License Agreements: Using a domain name’s license is becoming more and more popular in the Internet age, and this form allows some flexibility for both sides. Because domain names can be scarce (for example, many of the “shorter” domain names are already taken), it’s important that these license agreements exist to allow licensing access for the licensees.
- Music Licenses: Licensing in music is a hot issue today because of the nature of file-sharing. But if you are going to use music to make a profit, you’d better be sure that you have the license agreement in place to verify that you are in fact a verified licensee.
- Patent License Agreements: Copyrights aren’t the only type of intellectual property that can be licensed out in an Intellectual Property Licensing Agreement. Patents, too, can generate a lot of revenue for their original holders.
Are there more Intellectual Property Licensing Agreements? Yes, and many of these categories have their own specific forms to best suit your own situation.
What if I don’t plan on making any money from protected material?
You may still need to get permission for certain types of uses. Buying a song and listening to it is an authorized use of the material, of course, but some issues – such as stock photography – may require that you also get licensing rights for a non-commercial use. In these cases, it might sound like a difficult task to become a licensee, but many businesses that own intellectual property like stock photography actually make the process quite easy for their customers.
What about trademarks?
Trademarks are still an important part of intellectual property, and even though their use is somewhat limited compared to the use of patents and copyrights, it’s still important to acquire a license to use a trademarked piece of property if you intend on using it. There are indeed forms that can facilitate exactly this process, such as the License of Tradename form and Trademark License Agreement.
When are Intellectual Property Licensing Agreements valid?
Believe it or not, Intellectual Licensing Agreements, once signed, are fairly straight-forward contracts. It might take a lot of negotiating between two parties to reach a deal, but once reached, the forms themselves are quite simple. The only requirements of validity are the standard contract requirements (age of consent, sound mental mind for both parties, etc.). Because the issue of consideration – the value each side receives as a result of the deal – is handled automatically by the nature of Intellectual Property Licensing Agreements, there is generally only one major issue remaining. That issue is whether or not the licensor truly owns the copyright or intellectual property that is being licensed. If all of these requirements are met, the agreement will be valid.
When are Intellectual Property Licensing Agreements enforceable?
The enforceability of these licensing agreements will be enforceable upon their signing – usually, the terms of the deal go into effect right after the signing has taken place. However, there may be stipulations within an individual contract itself that change the enforceability of the contract. For example, if one party fails to live up to their end of the deal, it may be rendered invalidated and therefore unenforceable.
When are Intellectual Property Licensing Agreements effective?
Typically, this happens right after signing. Many licensing agreements are made for a set period of timewhich means that the effectiveness of the contract is limited to that period of time. However, if one party has not lived up to their end of the agreement, the contract itself will still be valid and retroactive payment may be required.
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Three Things You Should Know About Intellectual Property Licensing
Intellectual property has been around for a long time, covering a range of art forms and sciences. It’s been around since the patent – U.S. patents are virtually as old as the United States itself. And intellectual property has been protected in this country through the golden age of Hollywood and TV, up until the present day, when it’s more relevant than ever.
But protecting your intellectual property is not the topic for today. Rather, being sure that you can leverage your property into a real income is the goal. Intellectual property that provides a lot of value to a lot of people should not go ignored; it should generate income to reward the person who created the intellectual property in the first place. But how is money made from intellectual property?
In a word: licensing. But since so many people are confused about the subject, we’ll break it down to its simplest form and tell you three things you need to know about this process to leverage the most possible financial gain from your intellectual property.
1. Everything should be in writing.
Granting someone permission to use your intellectual property without having anything in writing can be very risky – mainly because it’s so hard to prove a licensing agreement ever existed between you and the person using your property. That’s why it’s so imperative to put license agreements down on paper; you want to make sure that the money you’ve agreed to is actually being paid to you. Any potential fraud should be mitigated by handling the process right from the beginning. And since the licensing agreement is put in writing, you can further help yourself by making provisions early on for the payment of the licensing fees. This will help ensure that each person you’re selling the license to is complying with your requests to make licensing as easy on you as possible.
2. Your license agreement should be specific.
Because the phrase “intellectual property” encompasses such a wide range of creative and intellectual endeavors, it should go without saying that your specific licensing agreements need to articulate exactly which of your intellectual property is being discussed. Is a specific song being licensed, or an entire range of music? Is there something that isn’t specific but should be? The more specific your contract is, the better your licensing agreement will be.
It’s better to be ‘too” specific than not to be specific enough when it comes to many contracts. That doesn’t mean that using a licensing form can’t be a simple process, but you’ll still want to make sure both sides are fully accountable for what they’re trying to do. Without specifics, an agreement like this is essentially meaningless.
3. You should fight hard for your property.
Too many people forget just how extensive intellectual property rights can be. They allow other people to use their property without permission and don’t take any action because they believe that there isn’t much money to be made, or that they don’t’ have a solid complaint to be made. But the truth is that intellectual property law is not only extensive, but very specific in the way it addresses your creations. You should be willing to fight hard for your property and generate an income from it if someone else is making money off of your work.
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Licenses
Popular - Licenses for use in various intellectual property matters. These forms include licenses for service marks, copyrights, domain names and music. Also included are shrink-wrap, stock photo and trademark license agreements.
This License Combo Package contains our most popular patent license agreement related forms, all in one convenient location. Carefully drafted by experienced attorneys, this combo provides instructions and model forms that can easily be tailored to your unique situation, while ensuring compliance with governing laws. Including Patent Application Assignment Agreement, Patent Assignment Agreement, Patent License Agreement, Assignment of Interest in Patent and more, this combo has what you need.
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While Copyright License Agreements and Copyright Assignment Agreements are both used to allow a party to use the full protections of copyright law in respect to intellectual property they previously didn’t... View More
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Copyright License Amendment for use when amending an existing copyright license. This agreement sets out the provisions to be amended and those provisions which will... View More
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Domain Name License Agreement between the owner of a domain name and a party who is granted a license to use the domain name. This form contains the necessary terms... View More
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Home Video License Agreement for use when distributing a home video and its associated rights. This agreement includes provisions addressing license territory, rights... View More
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Music Licenses for use in the music and entertainment industry. Included are an acquisition of all and certain music rights license, a sync and performance license... View More
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Patent License Agreement allows the owner of a patent to transfer the rights to another party. This license sets forth the license term, intended use of the license... View More
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Shrink-Wrap License for use when creating a limited, non-exclusive license between a software developer and a purchaser, allowing purchaser to use the software in the... View More
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Stock Photo License for use when licensing a photograph or image for Commercial Use. This license agreement contains the exact fees for use of the photo and who owns... View More
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Stock Photo License (Non-Commercial Use) will license an image or photograph. This license includes who owns any rights in intellectual property and fees paid for the... View More
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Trademark & Trade Name License Agreements for use when licensing rights in these types of intellectual property. These agreements include the rights licensed, whether... View More
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