Licensing Intellectual Property
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Licensing Intellectual Property Lawyer Los Angeles

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Intellectual property is a work or an invention that is the result of creativity, such as a manuscript or a design to which one has rights. The many forms of intellectual property include patents, copyrights, trademarks and trade secrets.

A licensing agreement is a collaboration between an intellectual property rights owner (licensor) and another who is authorized by the licensor to use such rights (licensee) in exchange for a royalty (fee or agreed upon payment).

Components of Licensing an Intellectual Property?

A typical intellectual property license will specify the rights granted, the term of the agreement, the royalty, the specific market, field of use, representations, indemnities and warranties regarding the intellectual property, infringement issues, tort liability for products or services covered by the license, and other factors. Wex Law attorneys can assist with your representation in drafting a license.

Licensing Grant Clause

The grant clause sets forth what intellectual property rights are being conveyed. The grant can be exclusive (i.e., only the licensee has the right to exploit the intellectual property rights) or non-exclusive (i.e., the licensor can grant similar rights to other parties). The grant can be limited by geography (such as U.S., worldwide), and field of use (such as for cellphones but not laptops). You can discuss this further with a Wex Law attorney in our Los Angeles office.

Licensing Improvements

An intellectual property license can also define each party’s rights to improvements of the intellectual property technology. Depending on the negotiation, improvements might be solely owned by the licensor, licensee, or jointly owned by both through a strategic alliance. To discuss further, Wex Law offers a free, 30 minute consultation with an attorney.

Licensing Consideration

Payment of consideration can be structured in many ways. The license agreement typically requires a licensee to pay royalties based upon sales or on a per-unit basis. The license can also require minimum annual royalties or minimum annual sales to be sure the licensee is diligently marketing the products or services covered in the intellectual property. The license agreement can also require that the licensee provide reports to the licensor (e.g. of sales or revenue) to ensure accurate royalty payments. It is important to have a minimum annual sales amount to ensure that your license wasn’t purchased with the intent to block you out of the market. Speak to a Wex Law attorney in our Los Angeles office to discuss further.

Licensing Infringement

An intellectual property license can indenture each party’s responsibilities for enforcing the intellectual property rights along with assigning liability if the licensee is involved in an infringement law suit. Typically, the parties desire to have control of any infringement litigation, but they also want to avoid costs being required to defend or indemnify the other party. A Wex Law attorney can further discuss the infringement clause.

Licensing Due Diligence

An attorney should assist with due diligence. License agreements can require due diligence by the licensee to develop and/or commercialize the intellectual property. Such terms are typical in license agreements to ensure that the intellectual property is used and not just put on the shelf. For example, the licensee can be required to use reasonable efforts to develop and commercialize products covered by the license. License agreements will also typically include milestones that must be met in order for the licensee to maintain the license. The license can also require submission of periodic reports regarding the licensee's activities related to the development and testing of the products covered by the licensed intellectual property.

Licensing Indemnities and Product Liability

It is important to have an attorney sit with you before drafting indemnities and product liability clauses. Licensors and licensees can provide various indemnifications to each other in a license agreement. The license can include representations, indemnities and warranties concerning the intellectual property and can require indemnification against any inaccuracy or loss arising from those representations and warranties. The licensor can require the licensee’s compliance with applicable laws, such as export controls, tax codes, etc. The license may include representations by the licensor that they own clear title to the intellectual property and/or that the intellectual property is valid and enforceable, and/or that none of the products produced under the intellectual property are known to infringe other intellectual property held by third parties.

Dispute Resolution

License agreements can require the parties to provide notice of any breach of the agreement and can specify periods during which any such breach can be cured. The license agreement can also be drafted so as to refer to one of several different processes used to resolve disputes between parties, including negotiation, mediation, arbitration, collaborative law, and litigation.

Transferability

License agreements can provide the licensee a right to sub-license or re-assign the intellectual property. The owner of the license can require approval of any such agreement because the licensor may wish to prevent a competitor from obtaining license to the intellectual property.

Termination

License agreements can include negotiated provisions that can detail how the agreement can be terminated. It is possible for the agreement to specifically provide for termination upon breach of certain terms of the agreement.

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