Intellectual property (IP) is the product of human creativity and thought. Companies protect intellectual property through patents, trademarks, and copyrights. Trade secrets and intellectual property can be considerable assets for a company. Licensing intellectual property is one way that companies make money from their intellectual property. Our New York City business law attorneys discuss IP monetization through licensing agreements in this blog.
Why Would a Company License Intellectual Property Rights in New York City?
Licensing intellectual property involves granting permissions to other parties or individuals to use a company’s intellectual property. IP monetization through licensing agreements has several benefits, including:
- Generate revenue streams by allowing others to use your IP assets through nonexclusive or exclusive licensing agreements
- Enhance your brand by increasing visibility and building a good reputation through licensing agreements with other parties
- Increase innovation and development by partnering with other companies
- Partner with another company to bring a product to market to share risks while maintaining ownership of the intellectual property
- Partner with licensees to reach new markets to expand your customer base
Navigating licensing agreements for intellectual property can be confusing. An agreement must be drafted very carefully to ensure your intellectual property is protected and remains your property at the end of the agreement.
What Is a Licensing Agreement for Intellectual Property?
An Intellectual Property Licensing Agreement outlines the conditions and terms for granting permission to a licensee (i.e., another party) to use the intellectual property of the licensor (i.e., owner). The agreement is a legally binding contract enforceable in court. It may be an exclusive contract, giving the other party the exclusive right to use the intellectual property. Non-exclusive contracts allow the IP owner to simultaneously license the intellectual property to multiple parties.
When negotiating an IP licensing agreement, key elements of the contract include:
- A clear definition of the intellectual property subject to the license
- Specify whether the license is exclusive or non-exclusive
- The payment terms for the use of the IP, including flat fees, royalties, or a combination of both
- The approved uses of the intellectual property could include distribution, reproduction, adaptations, etc.
- The territory for the licensing agreement
- Specific rules and terms of how the IP must be protected while being used by the licensee from disclosure to other parties
- Details on how the IP can be used to maintain the company’s reputation and integrity
- The duration of the license and conditions under which the agreement may be terminated
- Resolution procedures for disputes and enforcement rights, including jurisdiction, remedies, and penalties
The above list is not an all-inclusive list of provisions that should be included in a licensing agreement. The agreement should be customized to meet the needs of the parties. With the help of a business lawyer, you can negotiate and draft a licensing agreement that protects your IP rights and maximizes the monetization of your intellectual property.
Learn More During a Consultation With Our New York City Business Law Attorneys
IP monetization can provide a lucrative avenue for businesses to increase their revenue streams. However, protecting intellectual property with licensing agreements is essential. Contact Kent, Beatty & Gordon, LLP to discuss how we can help you draft agreements and contracts that protect your rights and future profits.