Intellectual property is an intangible form of property that has value similar to how tangible property has value. With tangible property, it is easy to allow other people or businesses to rent or use the property through leases or rental agreements, and a generally minimal question as to who owns the property and what constitutes proper use of the property. However, when it comes to “renting” or allowing the use of intellectual property, the intellectual property holder must create a special type of contract that allows other people or businesses to use its intangible property, while still maintaining ownership and control rights; these contracts are called licensing agreements.
To draft an effective licensing agreement, it is important to have a specialized knowledge of intellectual property law. Each area of intellectual property law carries with it the nuances of what should be included in a licensing agreement. For instance, the term of a typical exclusive patent license may last for the entire duration of the patent (20 years), but a copyright owner may not be as inclined to offer the term of an exclusive license for the duration of the copyright because the duration of copyright is currently the author’s life plus 70 years, which would leave the author’s heirs bound by the license.
License agreements typically come in two forms: exclusive licenses or non-exclusive licenses. Exclusive licenses are granted exclusively to one licensee within a certain scope or field; however, it does not mean that the intellectual property owner is only granting the one license. For example, an exclusive license may be granted to a licensee for use in California and another exclusive license may be granted to a separate licensee for use in Arizona. Both licensees have the right to exclude others from using the intellectual property in its specified territory. Contrast with a non-exclusive license where the licensor may grant other licenses within those territories. Clear delineation of scope, territory, term, prohibited uses, and royalties must be made in a properly drafted licensing agreement. An experienced contract law attorney with specialized knowledge in intellectual property can help you accomplish this goal.
- What types of licenses are there for intellectual property?
- Do I still keep my ownership rights if I issue a license?
- How do I determine the term of the license?
- What happens if the licensee exceeds the scope or the term of the license?
- Can I use a licensing agreement that I found on the Internet?
Additional Contract Law Resources:
If you need a license agreement drafted or advice on whether to issue a license for your intellectual property, it is important to find an attorney experienced with license agreements in Encinitas. Click here or call 760-517-8409 to schedule a free consultation.