Definition Of International Licensing Agreement
Licensing is an agreement that allows another company to use protected materials, such as: licensors often use licensing agents to manage their licensing programs. These agents perform tasks such as contract negotiations or product sharing processes for their clients. In exchange, the agent receives a certain percentage of all license revenue. For the licensor, the advantage of binding a licensor lies in the agent`s expertise and network of contacts. The licensor shall also take into account the costs of the agent in relation to the costs and time required to set up an internal licensing service to carry out the operation. If the agreement does not work and the licensor wishes to terminate the contract before the expiry of its term, clearly defined termination clauses must be included in the contract. As with other agreements, the parties should be able to terminate the licence agreement in the event of a material breach. The graph below shows the different types of licensed goods, with their relative shares in the estimated total revenues of the licensing sector, which were generated in 2016. The chart is followed by a brief description of the main segments of the sector. The license agreement may also include minimum payments for advertising and sales promotion.
In all cases, the licensor shall retain audit rights to verify the accuracy of the licensee`s accounts for royalties and other financial obligations. Currency and payment methods – such as wire transfers or other methods – must also be indicated and it is important to know what taxes can be levied on sales and royalties. There should be a section of your agreement clearly indicating all parties who have the right to use the protected elements mentioned in the agreement. This can be an important component when a dispute arises and the parties begin to blame each other for a breach. You need to make sure to involve the authorized parties in both companies so that you know where a breakdown occurs and who is responsible for it when it occurs. A licensing agreement is a contract between two parties (licensor and licensee) in which the licensor gives the licensee the right to use the licensor`s trademark, trademark, patented technology or ability to produce and sell goods. In other words, a license agreement allows the licensee to use the licensor`s intellectual property. Licensing agreements are typically used by the licensor to commercialize their intellectual property. License agreements limit the conditions under which one party may use another party`s property….