As you can see, there are many types of licenses. An experienced IP lawyer can help you understand the type of license agreement you need and what needs to be concluded in that agreement. An example of a licensing agreement in the restaurant sector would be for a McDonald`s franchisee to have entered into a licensing agreement with McDonald`s Corporation allowing them to use the company`s branded and marketing materials. And toy makers regularly sign licensing agreements with movie studios that give them the legal power to produce action characters based on popular similarities of movie characters. That is the goal. The parties are designated by identification, hereinafter referred to as “licensors” and “licensees” or “short names”. Non-competition. The licensor undertakes not to allow anyone to compete with the licence in the area and period specified in the agreement. This section limits when and where the licensor can sell their property. As a result, the licensee may be the only entity selling that product or service in a given territory. For example, a Burger King franchisee would want to be the only Burger King in a given area.
Without this agreement, the licensor could allow the appearance of another Burger King franchise next door. This type of agreement allows Harvard researchers who are starting a new company to license non-patentable, copyrighted software they have developed as part of faculty research efforts. In cases where there is patentable content such as unique algorithms, please read the “Basic Exclusive License” model agreement published above. As part of the granting of subsidiary licences, the licensee could be allowed to authorize another entity to use the licensed plant. For example, if you are a movie producer and you are conceding a song, you may still need permission to allow another entity to use the section of your movie in which the song is played. The license agreement usually sets out the region to which the license applies and a period of time. It should also be indicated whether the licence is exclusive or whether other licensees may at the same time form a licence agreement. Scale terms can also be included, for example to determine the use of artwork for different versions (hardcover vs. paperback) of a book. It could also prohibit use in advertising campaigns.
These are usually the most complex types of licensing agreements, as everything is related to obtaining and maintaining a patent. Most licensing agreements also address quality. For example, the licensor may include in the contract conditions obliging the licensee to provide product prototypes, packaging models and even occasional samples for the duration of the contract. Of course, the best form of quality control is usually carried out before the fact – carefully checking the reputation of the licensee. Another common quality regime in licensing agreements concerns the method of disposal of unsold goods. If the remaining items in stock are sold as cheap knockoffs, this can damage the licensor`s reputation in the market. An example of a very common property, which is featured in licensing agreements, is the image of a movie superhero. Toy makers often link it to sell action characters that are much more likely to be bought if they are based on a popular superhero. Another common example is the licensing of a song for an advertising campaign or for use in a movie. In the fast food market, there are a number of companies that are based on the franchise concept, where a franchisee has authorized the rights to the names, products and advertising materials of the main company.
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