WHAT TO KNOW ABOUT LICENSING AGREEMENTS.
A LICENSING AGREEMENT is an agreement between two parties, wherein one party called the LICENSOR grants to the other party (the LICENSEE) the rights to use its property for a specified period. The property involved may be Real, Personal or Intellectual Property. However, licensing agreements are often used for Intellectual Property transactions.
The usual types of Licenses granted include:
- Public Performance License: This License is granted for the use of music in public places and public platforms. e.g., radio, television, online radio, music festivals, concerts, super markets etc.
- Mechanical License: Usually issued to a record company to authorise the reproduction and distribution of a specific composition at an agreed fee per unit manufactured and sold.
- Synchronization License: This is a vehicle which grants the right to synchronize the musical composition in timed relation with audio-visual images on film or videotape.
- Sound Recordings and Distribution License Agreement: This has to do with licensing the exclusive rights on behalf of copyright owners in a sound recording.
- Trade Mark Licensing Agreement: Granting license to a party to use the trademark of the Licensor.
- Patent Licensing Agreement: The patent owner grants certain rights to third parties to make use of the patented inventions by specifying what the licensee may do with the invention in exchange for a royalty paid to the licensor. For example, IBM’s decision to license the operating system for its PC computer from Microsoft
The basic features of a license agreement includes:
- Parties : LICENSOR/LICENSEE.
- Type of license granted.
- Nature of right granted: whether exclusive or non-exclusive rights to the Licensee.
- Territory of use.
- Obligations of the parties.
- License Fee/Royalty.
- Ownership of Intellectual Right.
- Duration of the License.
- Transferability of License.
- Termination Clause.
- Dispute Resolution Clause, among others.
Most businesses are founded on elements of Intellectual Property, and will need to license solutions or rights integral to their businesses. Most of the points raised in this text will definitely come in handy.
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