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Licensing Agreements: Protecting Your Intellectual Property

Intellectual Property Licensing Agreements

Protect Your Intellectual Property: Licensing Agreements

Intellectual property (IP) has become a bit of a buzzword in the legal world. The thing is that even though most people have some idea about the concept of intellectual property, they may not fully understand what it exactly it includes. In its simplest form, intellectual property is basically anything that is not tangible property. In other words, while tangible property would be things like your car, house, or jewelry, intellectual property instead covers art, photos, videos, poetry, inventions, music, films, designs, software, logos, graphics, designs, brands, and secrets.

Ownership Over Your Intellectual Property and Licensing Agreements

Naturally, establishing ownership over those types of intangible assets is just as important as having ownership over tangible ones, if not even more valuable. As an example, take into consideration the value of the Apple logo and branding, the copyrights and respective royalties of Game of Thrones, and the many patents that go into making a new product for consumer use. All of these instances involve invaluable intellectual property that must be protected to ensure profitability and ownership. In fact, intellectual property just gets more and more crucial to our economy, especially with the boom of mobile tech and software.

Profiting from Intellectual Property

If you created and own intellectual property, you’ll want to protect and profit from it. There are two primary ways of achieving that. One way is by making use of the intellectual property yourself; for example, you could manufacture a patented product or sell original copyrighted products you have ownership of. Alternatively, you can choose to license the intellectual property to another entity, effectively granting them the right to manufacture your patented product or make use of your copyrighted material in some way. That’s exactly where licenses come into play. They are basically contracts which help you regulate, manage, protect, and profit from your intellectual property and creations.

What Are Your Rights with Licenses?

A licensing agreement permits an intellectual property rights holder (AKA the licensor) to make profit from an invention, creation, or novel work by charging a user (AKA the licensee) for the product’s use, distribution, or commercialization. Licenses also serve to protect proprietary rights in other related fields, like software development and other OS or virtual products. Importantly, you should know that you have the ability to use licenses to give someone permission to utilize your intellectual property in a certain way for a specific period of time for a particular price.

What Are the Categories of Intellectual Property?

For the most part, all kinds of intellectual property that you will encounter fall nicely into one of the following four categories.

  • Copyrights–these protect original works of an author or creator in any tangibly expressed form
  • Patents–these protect original inventions and designs
  • Trademarks–these protect words, phrases, names, and symbols which identify brands, goods, companies, and their services
  • Trade Secrets–these protect methods and systems, like sensitive data, software, formulae, recipes, techniques and processes and other key knowledge.

Ensuring Your Intellectual Property Is Yours

Since intellectual property law is one of the most complex areas of law, requiring tons of cross referencing with both state, federal and international law, it’s in your best interest to ensure you have an intellectual property lawyer in place to safeguard your rights and creations. Outside of that, the US Patent and Trademark Office (USPTO) and the US Copyright Office also offer invaluable information about the intellectual property registration process.
A few intellectual property safety measures, such as copyrights, happen automatically in certain scenarios but even those should get formally registered with the government. Several other protective measures, like patents and trademarks, are granted by the USPTO and for those the application process is even more convoluted. As for trade secrets, those often don’t get “registered” formally at all, but they can still be subject to some protective measures in place through a variety of state and federal laws.

Include These Things to Ensure You’re Covered

Despite all those intricacies, licensing agreements do not always have to be so long and hard to understand. If you think about it, an effective agreement is one that is upfront and transparent because it is more likely to be agreed upon and respected by both parties, and, ultimately, it’s more likely to be upheld and enforced by the courts. As such, there are certain terms, condition, and factors that you’ll always want to address in the majority of licensing agreements surrounding intellectual property.  

The Scope of Licensing Agreements

The first major issue you’ll want to address is the scope of the license. For example, do you want the licensee to have unlimited use of your intellectual property, or do you want the licensee to only use your intellectual property in specific ways for a limited period of time? In this sense, you can think of licensing as assigning limited use rights for property to the leaser. The rights that the agreement provides should be broad enough so the buyer is interested in their stake in the deal, but narrow enough that you do not relinquish permanent, uncontrollable power over your valuable creation or asset. Imagine that you created a great song track that a company wants to use in the intro and outro of their latest ad campaign. You’d want to draft up a licensing agreement that limits the edits that the company can make to your original track, sets a time limit for how long the track can be utilized by the company, and ensures that the company provides credit to you somewhere in the ad or the website so that viewers can be aware of your work and your name.

License Agreements: Profits From Your Creation

Besides the scope, drafting up terms that describe and regulate the profits and revenue that your creation will generate is crucial. Some license agreements will simply work by having a one-time licensing fee, paid out in full. In this version of the deal, the licensor will immediately pay you some agreed upon amount and then they will be able to use your creation for a fixed period of time. Another way it could go down, is through recurring payments and profits such as royalties or monthly leases. In this scenario, the licensor has to pay you quarterly payments over over the course of the entire leasing period. It’s up to you to think about which of those arrangements would work best for your given needs and situation.

Other Important Terms You May Want to Specify

While the scope and revenue aspects are arguably the two most relevant parts of any licensing agreement, there is a plethora of other factors to consider mentioning as well. These can include:

  • The term of the agreement, specifying the length of time, usually given in years,
  • The rights to modify your creation and to combine it with other products; or the prohibition of any modifications to your product,
  • Any unacceptable uses of your creation,
  • Whether or not the licensee can transfer or sublicense your intellectual property over the course of the agreement,
  • Any warranties that you may offer with respect to the security or performance of your creation,
  • Any limitations on your liability,
  • Whether or not you are to provide support services after the agreement,
  • Nondisclosure agreements to protect sensitive or secretive information and data,
  • Infringement indemnity
  • Enforcement of punishments in the case of loss or any remedy in such situations,
  • Contract termination rights and protocol

Maintaining and Enforcing the Licensing Agreement

Problems can always emerge in the realm of intellectual property and even after a licensing agreement is signed, sometimes the licensor may use your creation in a way that violates the terms of your agreement. They can breach the contract if they fail to compensate you fairly as per the agreed upon terms in the licensing agreement, by sub-licensing your property elsewhere against your agreement, or by any number of other means that can violate your terms. In these scenarios, you have the right to file a lawsuit against the party that committed the breach of your agreement in an attempt to enforce your intellectual property rights. You can seek remedies through damages, losses, or other harm that you may have sustained as a result of the licensee breaking your agreement.

The Significance of Having Strong Legal Counsel

As we have seen, intellectual property law is unfairly complex and tricky to navigate–especially on your own. This is because licensing agreements and intellectual property management requires specialized knowledge of state and federal laws pertaining to your rights as well as a strong awareness of business practices and judgements. To make sure you have the best experience with your new creation and to honor the integrity of your intellectual property, it is vital that you have access to skilled Glendale intellectual property lawyers in this particular field of law. We at Kaass Law believe in your ability to produce meaningful novel works of art and innovation and we fight to ensure our clients receive the correct treatment and compensation for their intellectual and artistic property. If you or a loved one need legal counseling or help surrounding an issue regarding intellectual property, licensing, trademarking, or copyrighting, then do not hesitate to contact us. We invite you give us a call at (310) 943-1171 to speak to our Trademark and Patent lawyers today.

KAASS LAW, 815 E Colorado St #220, Glendale, CA 91205, (310) 943-1171


KAASS LAW is authorized to practice law in California. The above content is intended for California residents only. This content provides only general information which may or may not reflect current legal developments. KAASS LAW expressly disclaims all liability in respect to actions taken or not taken based on any of the contents of this website. The above content DOES NOT create an attorney-client relationship. KAASS LAW does not represent you unless you have expressly retained KAASS LAW in person at the KAASS LAW office.

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