In order to benefit from a license agreement, the owner must ensure that his agreement with the potential user of the premises is indeed a license and not a lease. This is not necessarily an easy task. If you simply refer to the Agreement as a « License », this will not be the case. Whether an agreement is considered a licence rather than a lease depends on whether the agreement has or lacks the three essential characteristics of a real estate licence: (1) a clause that allows the licensor to revoke « at will »; (2) the retention of absolute control on the premises by the licensor; and (3) the provision by Licensor to Licensee of all essential services necessary for Licensee`s Authorized Use of the Premises. Licensing agreements are often used for the commercialization of technologies. Since licensors want (and should) retain some control over their products and services, most agreements impose affiliation or underselling requirements. These can be so simple that approval is required before the negotiator can start working, or as strict as the signing of an additional agreement with the licensor by affiliates. Given the above details, everyone can see that licensing agreements are complex. The safest strategy is to publish your legal needs in the UpCounsel market.
The lawyers on this site have a lot of experience in drafting license agreements that meet everyone`s needs. Whether you`re a new inventor or representing a growing company, UpCounsel`s lawyers can protect your interests and help you grow your brand. Home / Articles Published / Tenants-Licensees, Licensees, Landlords-Licensors, New York Eviction Process, Landlord-Tenant Process, Good Faith License Agreement / Using a License Agreement instead of a Lease Do your due diligence before the agreement. Both parties should carefully check the other party. Review business loans and management resumes. Ask for financial statements. Visit the other company`s offices and production facilities. Try everything. Intellectual property licensors use three main types of licensing agreements. An example of a licensing agreement in the restaurant space would be if a McDonald`s franchisee has a licensing agreement with McDonald`s Corporation that allows them to use the company`s branding and marketing materials. And toy manufacturers regularly sign licensing agreements with movie studios, giving them legal authority to produce figurines based on popular images of movie characters. License agreements set out the terms under which one party may use another party`s property.
While the properties in question may include a variety of elements, including real estate and personal effects, licensing agreements are most often used for intellectual property such as patents and trademarks, as well as copyrights for written materials and visual arts. Another form of protection is to base renewals on royalties. A licensor expects the licensee to pay a certain amount over time. In this case, the Licensee may renew the Contract. If this is not the case, the agreement terminates automatically. Many license agreements allow the licensee to hire affiliates or sub-distributors. This increases the scope of the product and overall revenue, but unlimited access can result in profit shifting and harm the licensor. Another important element of a license agreement sets the company`s schedule. Many licensors insist on a strict go-to-market date for products licensed to external suppliers. After all, it is not in the best interest of the licensor for a company that never markets the product. The license agreement will also include provisions on the duration of the contract, renewal options, and termination terms.
The steps to entering into a license agreement are as follows: Owners should also make judgments about the commercial feasibility of obtaining licenses that are willing to accept license agreements with revocation clauses « at will ». The willingness of potential tenant-licensees to sign such agreements may depend on the type of space the owner makes available for licensed use. B for example if the licensed space is a warehouse, a multi-user office suite or a simple storage space. To attract licensees who fear making a significant investment in space conditional on a revocable license, owners may create new financial incentives or include in the agreement a mechanism to compensate a non-defaulting licensee for the remaining undepreciated value of their investment if the licensor invokes the « at will » clause of the agreement. License agreements typically include fees for the use of protected material. In some cases, Licensor may exchange another product or service in exchange for the use of the Materials. Many license agreements are the result of working with a licensing agency or licensing agent. In fact, even seemingly clear termination clauses may not work as desired. Take the case of TransCare – a medical transportation service that has a licensing agreement with software company Digitech to replace its shipping program. Although Digitech`s commercial offer includes a mention of a « 90-day satisfaction guarantee », this exact wording was not included in the group`s license agreement. .