Concept Licensing Agreement
For a company that has an excellent product but does not have the capacity to manufacture it, licensing is a great way to market that product. Entrepreneur says that, among the possible opportunities to market a product, licensing “offers the greatest potential return on investment and has the greatest chance of success.” Each licensing agreement is unique and these agreements vary by type (copyright, trademark, patent, etc.). In general, you will find these sections in most licensing agreements: Licensing agreements can cover a variety of real estate: real estate, personal property or intellectual property such as copyright, trademarks or patents. The granting of subsidiary licences. The licensee may be granted the right to authorize someone to manufacture or sell their products. This depends on the specific terms of the license agreement. A licensing agreement is a legal contract whereby a party that owns certain IPs allows another party to use that IP. The owner of the IP (the licensee) receives a payment (a fee) if the other party (the licensee) uses the IP. A non-compete clause. The licensee agrees not to allow anyone to compete with the licence in the area and period defined in the agreement. Partial agreements. In the licensing agreement, as with other types of contracts, there may be sub-agreements. For example, the licensee may require a confidentiality agreement to prevent the licensee from disclosing proprietary product features or processes to others.
The taker may require the donor to sign a non-compete agreement to prevent the donor from breaking the agreement by allowing another person to sell the product in the exclusive territory of the taker. Brands are significant commercial sources, namely brands, logos or slogans. Brand licensing agreements allow trademark holders to let others use their IP. Christian, Glynna K. “Joint-Ventures: Understanding Licensing Issues.” The licensing newspaper. October 2005. Trade secret licensing agreements are often entered into with confidentiality agreements (or NDAs). The NDAs indicate that the party receiving certain confidential information cannot share it with third parties. There are certainly advantages to licensing your business assets, but be sure to consider these factors when creating a licensing agreement: in May 2018, Nestlé and Starbucks entered into a $7.15 billion coffee licensing agreement.
Nestlé (the licensee) has agreed to pay $7.15 billion in cash to Starbucks (the licensee) for exclusive rights to sell Starbucks products (single serving coffee, teas, beans, etc.) through Nestlé`s worldwide distribution network. In addition, Starbucks receives royalties from coffees and packaged teas sold by Nestlé. There are also two different types of licensing agreements. In a non-exclusive license, the licensee can grant the IP license to more than one licensee. These types of licensing agreements generally cost the licensee less. An example of a licensing agreement in the restaurant industry would be that a McDonald`s franchisee has a licensing agreement with McDonald`s Corporation that allows them to use the company`s branded and marketing materials.