Licensing Intellectual Property

Sometimes a business deal requires sharing intellectual property (IP) with outside business partners, whether in the context of a joint venture or strategic alliance or simply when working with vendors and suppliers. In these situations, we often use licensing agreements granting the other party the right to use specified intellectual property, i.e., patents, trademarks, copyrights, and/or trade secrets. However, when you grant another party a license to use your IP, the agreement must also protect your valuable intellectual property rights by maintaining your ownership and control over that IP.

When might your business need a licensing agreement?
Licensing agreements may be warranted in a variety of circumstances, but here are a few common scenarios:

Your business is working with another party to generate revenue by “exploiting” certain intellectual property. For example, your business might produce content and then work with an outside party to market and distribute that content. Or you might give a vendor the right to create and sell merchandise that features your IP.
You want to work with an outside party to expand your business to a new area or into a new type of product. For example, in franchise agreements, the franchisee licenses the franchisor’s trademarks. In exchange, the franchisee gets to open the business in a new location, often with a protected geographic area.
You are selling certain business assets while retaining ownership of or the right to use some of the related intellectual property.
Your business sells software or software as a service. In these situations, you aren’t actually selling ownership of the software but instead granting your customers a license or right to use the software.

Trademark Licensing
When your business has worked hard to build its brand, that brand becomes incredibly valuable. And when a business deal calls for licensing your trademark to another party, then it’s credibly important for the licensing agreement to contain key provisions. If not, you run the risk of harming your brand’s reputation or even losing your trademark rights.

Any trademark licensing agreement should clearly identify:

the trademark being licensed,
how and where that trademark can and cannot be used,
whether the license is exclusive or non-exclusive,
acknowledge that the trademark is owned by the licensor, and
Any licensing or royalty fees to be paid for the use of the trademark.

It’s also important to confirm that the trademark is registered in the licensor’s name (or that registration applications have been submitted) in all of the jurisdictions where the trademark will be used and for all of the goods and services covered by the licensing agreement.

Maintaining control over your business’s trademarks is incredibly important for maintaining your trademark rights. You can significantly weaken and even lose your trademark rights if the trademark is not used consistently (i.e., changes to the spelling, font, logo, color, etc.). Licensing agreements should carefully dictate how your company’s trademarks are used. Typically, a licensing agreement will require that the trademark be used:

In its entirety,
Not combined with other trademarks,
With the appropriate trademark notice, i.e., ®,
In a manner consistent with your company’s brand usage guidelines, and
Only on products or services that meet the licensor’s quality control standards.

Copyright Licensing
Similarly, your business might license copyrighted material to other parties. For example, a consultant might allow another party to use their content in a non-commercial, educational context. Or an author might partner with another to make a derivative version of their work in a different format. Depending on the situation, we might use a short permission letter, incorporate licensing terms into a broader business agreement, or negotiate a more complex licensing deal.

With any copyright licensing, it is important to confirm who actually owns the copyright (and thus has the right to give others permission to use the material in question) and that the material doesn’t incorporate works that are actually owned by third parties (unless, of course, those third parties have given their permission to use their copyrighted material).

Copyright licenses can also be recorded with the U.S. Copyright Office. Recordation is not required, but it can provide certain benefits. In situations where the copyright has been transferred or licensed multiple times, often with conflicting permissions granted, recordation can help to determine which transfer of rights has priority over the others. However, a written agreement evidencing a non-exclusive license will generally take precedence over a later recorded transfer of copyright ownership. Recordation creates a clear public record, which can minimize some of this confusion later.

SCHEDULE A CONSULTATION

Flat Fee Information
Our intellectual property attorneys can help you determine the best way to commercially exploit your intellectual property and to protect it when entering into various types of licensing agreements.

IP Licensing Agreement: $4,275
Add HIPPA Business Associates Agreement: +$1,100
Review and Redline: $2,150

Publicity Waiver and Release / Model Release: $575
These short-form agreements may be appropriate when you need permission to use someone else’s name, image, or likeness.

Recent Trademark Law Articles