License agreements are used to grant the licensee the right to commercially utilize the licensor’s intellectual property rights. The licensor remains the owner of the licensed intellectual property rights, but the licensee may use the said rights in its business in accordance with the license agreement.
It is important to pay attention to the following matters:
What rights are being licensed?
Does it cover R&D, production, and marketing?
Is sub-licensing allowed and can you assign the license?
Are there geographical limitations to the scope and for how long will the license agreement be valid?
What is the pricing mechanism of the license agreement – royalties, downpayments, milestones?
What does the agreement say about reporting obligations and audit rights?
Will the parties do joint R&D during the term of the agreement?
The above questions are just some of the important aspects of a license agreement that should be carefully considered when drafting and negotiating a license agreement. Moreover, a license agreement should always be neatly aligned with the IP strategy of the licensor, ensuring that both parties perceive the arrangement as mutually beneficial and value-adding.
This blog is, obviously, only a general overview of the topic and if you need more analytical and pragmatic advise in respect of your licensing issues, do give us a call.
