Overview of intellectual property licensing contracts

1. Licensing intellectual property rights

Intellectual property rights include the exclusive rights of those who create products, including copyrights, trademarks, industrial designs, patents, geographical indications and plant variety rights.

Intellectual property rights may be the subject of a license agreement, in which the owner of the IP rights (licensor) may authorize a third party (licensee) to use and exploit intellectual property rights in business activities, according to conditions set by both parties. Licensing provides owners with valuable opportunities to expand their businesses into new markets, increase revenue with licensing fees, and develop partnerships.

When the owner of an invention, know-how or other IP asset is unable or unwilling to engage in all commercial activities (e.g., technology development, production, market expansion), they can benefit from licensing its IP assets.

Consenting to a third party's use of intellectual property rights is not equivalent to licensing. Furthermore, if an intellectual property rights owner intends to sell their rights to a third party, they will have to make a transfer of the intellectual property rights.

2. With a license agreement, the IP owner can authorize:

• Publishing texts, musical recordings, using software, reproducing a painting;
• Use a trademark registered in another territory;
• Copying a registered industrial design;
• Manufacture, use or sell a product or service that is protected by patent invention;
• Production, use or sale of a product protected by geographical indication;

Growing or marketing plants of a type protected by plant variety rights.

A license agreement must be in writing and may need to be registered with the Intellectual Property Office.

In some cases, the owner of the IP rights It may be necessary to keep certain information confidential, such as information related to intellectual property rights (unregistered technologies as patents or trade secrets) and/or the licensing agreement itself. permission, especially the financial aspects of that agreement. In this case, the IP rights owner should sign a non-disclosure agreement with the franchisee before entering into a licensing contract.

3. A licensing agreement can be tailored to the needs of the parties, but typically includes the following elements:

• Information of the parties;
• Subject of licensing;
• How to use and exploit this object;
• Type of license – exclusive, semi-exclusive (licensor and licensee both get to use and exploit the intellectual property), non-exclusive or open (any third party meets the requirements set by the licensor will be allowed to use SHT rights, for example: Creative Commons license – creative commons);
• Obligations of both parties;
• Form of payment (or non-payment agreement) – can specify a license fee (fixed amount for a certain period of time), a percentage of profits, or even a combination of payment types, e.g. a fixed amount when signing a contract and charging a percentage of profits throughout the process of exploiting intellectual property rights;
• Applicable territories;
• Licensing term;
• Possibility of additional licensing and licensing transfer;
• Regulation of new developments;
• Information security;
• Handling violations;
• Applicable law and;
• Courts or arbitration/conciliation agencies have jurisdiction to resolve disputes.

It should be noted that an owner can license a single intellectual property right multiple times, and they can involve different geographical areas and different forms of IP exploitation.

Regarding the subject matter of the licensing activity, the types of contracts can vary depending on the specific intellectual property right, with copyright, trademark and technology licensing contracts being the most common contracts. .

It's also important to pay attention to cross-licensing contracts, which license intellectual property rights to two or more parties without worrying about disputes. These contracts are especially common in areas such as patents, software and designs, where each party owns different intellectual property rights for the same product.

In addition to licensing IP rights, there are other types of commercial contracts in which intellectual property rights can be licensed, such as commodity contracts, franchise contracts and joint venture contracts.

Regardless of the type of contract, the parties will always have to master the legal provisions on contracts and the necessary procedures related to the protection of specific intellectual property rights.