If you own intellectual property (IP)—such as patented inventions, trademarked names, or branded logos—you understand how valuable that property is. Along with promoting innovation and economic growth, intellectual property can also provide legal protection and financial incentives for creators. For example, IP owners are able to grant licenses to third parties, allowing them to use their IP in exchange for royalties or fees which in return can produce mutually beneficial relationships.
You can walk into almost any store and see trademark or service mark licenses being used on merchandise like sports apparel, school supplies, grocery items, and other accessories. Technology patents are often licensed to be used for mechanical devices, healthcare products, computers, and smartphones.
Licensing intellectual property enables IP owners to leverage their creations, seize opportunities for business growth, introduce new products and services, and extend their presence across diverse geographic markets. Without protected IP to anchor a license, entrepreneurs who come up with an idea have a much more difficult time of profiting from those ideas.
Navigating the world of IP licensing can be complex, and it is always best to work with an experienced trademark attorney or patent attorney for professional guidance. Read on to learn more about the basics of intellectual property licensing and how it may help you and your business thrive.
What is an Intellectual Property License?
IP owners may grant licenses for any type of intellectual property, including trademarks and patents. This is essentially a written legal agreement in which the owner of a particular intellectual property grants permission to another party to use, distribute, or commercialize the IP in exchange for specific terms and conditions, usually including financial compensation. In addition, this approach could potentially make your intellectual property and brand more visible to a wider audience. Depending on what has been protected, an IP owner can choose to license specific elements of their technology or brand. Therefore, if you own the rights to intellectual property, licensing can bring you an additional source of revenue while also boosting your business growth.
How Does the Process Work?
The goal in entering an IP license agreement is for both parties to succeed and to continue to thrive in their respective business ventures. There are several considerations for the IP licensor to bear in mind during the process, such as costs, timeframes, territories, and assignment of rights. Consulting with an experienced intellectual property lawyer can be extremely helpful here. Once you have decided you want to move forward with intellectual property licensing, the process will typically involve the following:
- Identifying the IP you want to license
- Negotiating terms and conditions with the third party
- Determining financial considerations (royalty rates, milestone payments, etc.)
- Drafting a formal license agreement document
- Executing the agreement by having both parties sign
- Monitoring and enforcement
Different Forms of Intellectual Property Licensing
There are various forms of IP licensing that can be utilized depending on the specific needs and objectives of the parties involved. Here are 3 of the most common forms:
- Exclusive License: This type of license grants the licensee exclusive rights to use the IP within a defined scope and territory. In an exclusive license, the owner has agreed not to license the IP to any other parties or use it themselves during the term of the agreement.
- Non-Exclusive License: In a non-exclusive license, the licensor can grant the same rights to multiple licensees at once. This allows the intellectual property owner to offer flexibility and maximize the commercial potential of the IP.
- Sole License: A sole license falls between exclusive and non-exclusive licenses. It grants the licensee the exclusive right to use the IP within a specific territory or market segment, but the licensor retains the right to use and license the IP to others outside of that defined area.
IP owners may also choose to combine elements of each of these types of licensing agreements that creates their own custom form of licensing. By working with a reputable intellectual property law firm, you can be confident that your licensing agreement will work the best for you and your business’ needs.
Secure Your Intellectual Property Rights with Wilson Dutra
If you wish to license your intellectual property, or you have been approached by someone who is interested in entering an IP licensing agreement using your patent or trademark, a helpful first step is contacting a legal professional.
At Wilson Dutra, we understand the many complexities of intellectual property rights, and can provide our clients with the necessary expertise to ensure their trademarks and patents are always protected. To learn more about intellectual property rights, or to schedule a private consultation about IP licensing, we encourage you to contact our office today!