LICENSE AGREEMENTS

An owner of intellectual property can benefit by licensing rights in the property.

What is a License Agreement?

A license agreement is an agreement in which an owner allows the licensee to use specific property.  For example, a patent owner may license the right to use, make, or sell the invention claimed in the patent.  By licensing the rights to a product or process the owner of the product or process retains ultimate ownership rights.

It is extremely important that a license agreement clearly define the scope of the license. A non-exclusive license agreement is an agreement that permits the owner to license the rights to others.  An exclusive license agreement is an agreement wherein the licensee gains use of the rights to the exclusion of all others, including the owner, during the term of the license agreement. 

It is to your benefit to have a qualified practitioner draw up your license agreement, or in the event that a prepared agreement is presented to you, it is imperative that you have your own practitioner review the agreement to be certain that your rights are protected. 

Some areas which license agreements may cover include:

• Term (the length of the agreement);
  
  
• Minimum royalty payments to the owner;
  
  
• Schedule of payments to the owner;
  
  
• Auditing of royalties;
  
  
• How royalties are earned;
  
  
• Rights of the licensee to modify the product and/or combine it with other products;
  
  
• Prohibited uses of the product;
  
  
• Rights to transfer the license agreement to another party and/or sublicense;
  
  
• Warranties;
  
  
• Limitations on the owner’s liability;
  
  
• Support and maintenance services;
  
  
• Nondisclosure of confidential information;
  
  
• Indemnity for infringement;
  
  
• Enforcement of remedies;
  
  
• Provisions for termination of the license agreement; and 
  
  
• Ownership of improvements made by licensee.
  

Many problems can be prevented through careful drafting of license agreements.  To best protect your rights consult with one of our qualified attorneys before you sign any licensing agreement. 

For more information on how we can help to protect your rights and your property, contact James Ray & Associates toll free at (888) 692-7303 to speak with an experienced member of our staff today.