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Intellectual Property Licensing

Licensing is arguably the most common intellectual property monetization strategy. That’s because it is often the fastest and least complex method to unlock additional sources of revenue. IP owners usually start by licensing some IP to get comfortable with the process, and follow-up with more advanced strategies as opportunities present themselves.

Licensing Agreements Create Revenue and Business Opportunity

A licensing agreement is a legal contract between the licensor (IP owner) and licensee (IP “borrower” or “renter”). It typically spells out the exact conditions how another may use a patented technology, trademark (brand), copyright, or trade secret. In practicality, licensing agreements enable others to “make, produce and/or sell” certain types of goods and services. We quoted “make, produce and/or sell” because that may not be the most accurate definition of IP rights, but it is what most people commonly think of. Positioned well, licensing can evolve to become a new or strategic business unit, or whole new business, containing a portfolio of intellectual property.

Licensing Agreements Create Revenue and Business Opportunity

Whether you’re considering granting access to your intellectual property or gaining access to the intellectual property of another company, having an agreement in place can be a great revenue-generating opportunity. Licensing agreements help you control your competitive environment, by limiting or easing entry into new markets. And, they can promote valuable business relationships with strategic partners, vendors, and even your competitors, by helping to smooth industry challenges and minimize conflicts.

Key Considerations

Licensing agreements for patents, trademarks (brand identities), copyrights, and trade secrets (secret knowledge of how to do something) are mission-critical in industries where intellectual property is the key to competitive advantage. A simple misstep—like missing quality control procedures or limiting auditing rights–could cause the loss of your hard-earned rights and/or eliminate any potential recovery. 

Key Considerations

Licensing

That’s why it’s important to partner with legal experts who know how to craft licensing agreements that will help you achieve your overall business goals. Among other many benefits it provides, a well-prepared license agreement will:

  • Control how your intellectual property is used, marketed, and sold.
  • Positively affect your recovery of royalties and license fees.
  • Establish your rights in the event of a breach of agreement.
  • Harmonize your rights and obligations with licensee.
  • Mitigate a risk of loss in known worst-case scenarios and as well as ones that are unanticipated. 

In order to effectively license, an attorney should evaluate your business strategy, consider the anti-competitive risks, help determine what regulations may affect the license, and take painstaking care in drafting and negotiating your licensing agreements. These steps provide utmost clarity and protection—and minimize administration. This gives you an organized approach to your IP rights, minimizes risks, and gets everyone on the same page, especially with critical terms, like royalty rates.

Today’s global economy brings a whole host of issues to already complex licensing agreements. But with Nexio on your side, you can be assured of meeting all your IP needs.

We’re Here to Help

The attorneys at Nexio Law Firm are committed to helping our clients achieve their business objectives and maximize return on their talent and inventions. If you decide to create and implement an IP licensing agreement, it’s important to do all the necessary preparation to ensure your intellectual property—and your business—are well protected under the law. We can be reached at (949) 478-6830 or complete the contact form and we’ll be in touch soon.