How to Legalise Licensing Agreements in the Lucrative Technology Marketplace

1.  But let us first understand what is a licence agreement?

A licence agreement is a legal contract that allows one party (licensor) to grant specific rights to an intellectual property asset or tangible property to another party (licensee) in exchange for certain conditions, usually financial compensation. The licensor retains ownership of the asset, but the licensee obtains the right to use it according to the terms agreed in the licence agreement.

2. Two examples of licence agreements

Here are two examples of licence agreements:

2.1 Software Licence Agreement:

• Licensor: A software development company.
• Licensee: A company that wishes to use software developed by the licensor.
• Content of the Agreement: The agreement sets out the terms and conditions under which the licensee may use the software, including the duration of the licence, scope of use rights, restrictions, licence fee and future updates.
• Example of Use: When a company purchases a licence for Microsoft Office for use on its computers, it is entering into a software licence agreement with Microsoft. The agreement sets out the terms under which the company can use the software, including the number of users and restrictions on use.

2. 2 Trademark License Agreement:

• Licensor: A company that owns a registered trademark.
• Licensee: Another company that wishes to use the licensor’s trademark on its products or services.
• Content of the agreement: The agreement specifies how and where the licensee may use the trademark, the royalties or payments to be made to the licensor, the terms of duration of the licence and the conditions of quality and control.
• Example of Use: If a fast food franchise wants to use the name and logo of a well-known hamburger brand in its outlets, it would enter into a trademark licence agreement with the brand owner. The agreement would set out how the trademark can be used and what royalties must be paid in return.

These are just two examples of licensing agreements, but licensing agreements can apply to a wide variety of intellectual property assets, such as patents, copyrights, designs and trade secrets, as well as physical assets such as real estate or equipment. The terms of each licensing agreement are specific and are negotiated between the parties involved to meet their particular needs and objectives.

3. Identify Intellectual Property:

Start by identifying the intellectual property assets you wish to license, such as software, patents or copyrights.

4. Agreement drafting:

Copy and paste contract drafting is not an option. Work with a specialised lawyer to draft a clear and comprehensive licence agreement that spells out the terms, conditions and restrictions.

5. Registration of Intellectual Property:

In some cases, it is advisable to register your intellectual property – if the legislation allows it – before licensing it in order to protect it legally.

6. Determine the Terms of Use:

Specify how your intellectual property assets may be used, including any geographical or temporal limitations.

7. Consider Compensation:

Establish the compensation, royalties or royalties you will receive for licensing your intellectual property assets. Consider the taxation of those royalties.

8. Legal Review:

Make sure that the agreement observes applicable laws and regulations and conforms to industry standards. Pay attention to the invalidity of certain clauses. The autonomy of will is limited by the law. Parties can agree to whatever they wish, but sometimes what they agree to is illegal, against public policy and void.

9. Signature and Registration:

Once both parties agree to the terms, the agreement must be signed and, in some cases, registered with an intellectual property office.

10. Updating the Agreement:

As circumstances change, it is important to review and update the licence agreement as necessary.

Proper legalisation of licensing agreements in the technology marketplace is critical to protecting your assets and ensuring successful business relationships with third parties. Consultation with an experienced intellectual property and technology lawyer is essential to ensure that everything is done legally and efficiently.