Last week we introduced some basics about intellectual property licensing. In that post, we explained that license agreements facilitate formal relationships between entities that own intellectual property like trademarks or copyrights, and individuals or businesses seeking to license the right to use that property, usually commercially.

Any quick Google search about intellectual property licenses turns up form licenses as well as articles that advise against using standard forms for this important legal document. This advice is sound. It is the rare circumstance when a canned license form is adequate to protect the parties from the ramifications of unforeseen problems or license disputes.

Comprehensive licenses

Any license agreement should be drafted to reflect the unique nature of the intellectual property. At the beginning of the licensing process, the licensor or licensee should sit down with an experienced attorney to discuss the party’s goals in entering the license as well as concerns.

The lawyer can negotiate the terms of the license with the other party keeping the goals, rights and vulnerabilities of the client in mind. When there has been a meeting of the minds, the attorney can either draft the license agreement that addresses each provision in detail and contemplates likely contingencies or review a draft from the other party.

Specific provisions

Examples of issues to address in the license:

  • In what ways may the licensee use the intellectual property, including required quality standards
  • Responsibilities, if any, of licensor to provide support or continued product development
  • Geographical restrictions
  • Duration of license and whether it may be renewed or renegotiated
  • Whether license is exclusive or non-exclusive
  • Financial terms like fees or royalties as well as when payments are due
  • Confidentially and secrecy requirements
  • Responsibility for use of the intellectual property in compliance with laws of applicable jurisdictions
  • Dispute resolution method for breach or disagreements
  • Legal remedies for breach of agreement or infringement of intellectual property rights such as in trademark or copyright

The World Intellectual Property Organization has a detailed fact sheet outlining issues in licensing that may arise for either side. We will continue to discuss licensing issues in this space.