This is not a substitute for legal advice. An attorney must be consulted. "This work is protected under the copyright laws of the United States. No reproduction, use, or disclosure of this work shall be permitted without the prior express written authorization of the copyright owner. Copyright © 1994 - 2024 by LAWCHEK, LTD." |
How is intellectual property licensed? |
Licenses result from the
transfer of a portion of the rights in a particular
intellectual property asset from one party to another. The
party who originally owned the intellectual property is
typically referred to as the licensor. The
party receiving the intellectual property rights is
typically identified as the licensee.
Licenses may arise in a variety
of contexts and take many different forms. One
type of license is an express license, which results from an
actual agreement between the licensor and the licensee. An
express license is what is typically meant by the usage of
the term "license." Express licenses may be in
the form of an oral or a written agreement.
An implied license arises from
the objective manifestations of the parties. Because
terms of an implied license are not expressly agreed to,
courts typically find that any express license controls, and
will only find an implied license when no express license
exists. One particular type of implied license
is a shop right. An employer receives a shop
right, which is a royalty-free, non‑exclusive, and
non‑assignable license, to intellectual property created by
an employee who used the employer's resources or facilities.
While a particular form is not
required to create an enforceable license, it is desirable
to organize the license in a logical manner to minimize
disputes relating to the scope of the license. One
of the preliminary aspects in preparing a license is to
select a title for the license. Next, the
license should identify and provide the address for each of
the parties involved in the licensing.
The license should set forth a
description of the intellectual property rights that are
being licensed and the terms under which the rights are
being licensed. Identifying the scope of the
licensed intellectual property is particularly important
when less than all of the claims in a patent are being
licensed or when less than all of the "bundle of rights" in
a copyright are being licensed. When licensing
trademarks, the license must include provisions for the
licensor to monitor the quality of the licensee's use of the
trademark.
When addressing the financial
aspects of a license, the parties should evaluate how the
licensed intellectual property affects the value of goods or
services, such as making goods more appealing to consumers
or less expensive to manufacture. Compensation
may be in the form of a lump sum payment, periodic royalty
payments, or a combination thereof. One factor
affecting the most appropriate compensation plan is whether
the future value of the intellectual property is
ascertainable.
Another provision that is
frequently included in licenses is a most favored licensee
clause. Through the most favored licensee
clause, the licensee seeks to prevent the licensor from
granting other licenses on more favorable terms. However,
to exercise the most favored licensee clause, the licensee
must accept the subsequent license terms in their entirety. Example forms for a written license of patent and trademark rights are attached as part of this program. These forms should only be the starting point for preparing the written agreement, and should be particularized based on the unique requirements of each of the parties. |
Copyright © 1994 - 2024 by LAWCHEK, LTD.
This is not a substitute for legal advice. An attorney must be consulted.
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