A license agreement, also called trademark license agreement, is an agreement made between an intellectual property owner and someone who wishes to use that property in a business to legalize the utilization or exploitation of that property.
In the business world, the genuineness of a product or service is an important asset. This is the reason why whenever there is a new revolutionary or distinctive product or service that becomes extremely valuable because of its distinct features or novelty, it is often protected with patent, trademark or copyright. It then becomes an intellectual property of the individual or business establishment that registers its patent, trademark or copyright. Only the legal owner of that property can exploit it or sell it in a business. This, however, doesn’t prevent other individuals and business establishments to use that property for their advantage. If the owner of the intellectual property is willing to license other parties to benefit from the property, a license agreement can be made between them to legalize the use or the exploitation of the property.
Who Will Use a License Agreement?
Two parties that will use the license agreement are the licensor or the property owner who lets other people to use the property and the one who will use that property.
What Does a License Agreement Set?
A license agreement usually outlines many important issues related to how an intellectual property must be used. It usually determines how long a licensor grants the right to use an intellectual property to the licensees, standards and conditions that licensees must comply with when using the property, and other more specific issues, such as fees and royalties. Although there are various common issues that a license agreement set, the license agreement template used to make one contract may differ from one used to make another contract. In other words, there is no one definite template for all license agreement contracts, although the process to make the agreement is subject to laws and regulations.
Why Is License Agreement Necessary?
A license agreement is made to make sure that creative works that are protected by law and have economic value are not illegally used by parties who don’t own them. Examples of such property include company’s brand name, artistic works like paintings and musical compositions, and patented inventions that demonstrate technological advances. A license agreement is particularly used to prevent piracy, illegal copying and copyright infringement from ever taking place.
If you are looking for a general sample to understand it more, you can download the free but general license agreement sample below.