Licensing

How to profit from intellectual property

Intellectual property licensing agreements create a relationship between an intellectual property owner—the licensor—and a person given permission to use such rights—the licensee.  This gives the licensee permission to manufacture or sell the trademarked or patented item.  The licensor is paid a fee (royalty) in exchange for granting this permission to the licensee.  The goal of licensing is to protect and profit from the owner’s proprietary rights.  Many universities license their intellectual property to generate revenue for the institution and the inventors.

What happens when there is no licensing agreement?

Any unauthorized use of a product, without a licensing agreement, can result in litigation, injunctions, and/or monetary damages.   

What steps are involved in creating a licensing agreement?

When a licensor chooses to license a product or trademark, the first thing the licensor does is define the scope of the license and the limitations under which a product can be used.  Other considerations in drafting the agreement should include—

• The percentage the licensor is entitled to from the sale of the product (royalty)
• The amount of time the proposed license will be valid
• Types of uses not allowed by the proposed license
• Whether the product or mark covered by the license can be modified
• Procedures for terminating the proposed contract
• Enforcing the non-disclosure of information deemed confidential
• Determining the rights to sub-license and transfer
• Designation of who will enforce the intellectual property in the event of third party infringement

Contact us for help licensing

If you are interested in drafting a licensing agreement to profit from your intellectual property, please call patent attorney Larry Evans at (314) 303-1193 or contact us online.