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Intellectual property rights are valuable, and everything of value has a price, a potential market and many potential pitfalls...
How is IP it protected?
Passing off rights
Registered trade marks
Registered designs
Geographical indicators
Domain names
Design registration
Unregistered design right (UK only)
Semiconductor topographies
Artistic copyright
Design patents (USA only)
Trade secrets
Patents
Utility models (not in UK)
Unregistered design rights/semiconductor topographies
Databases
Copyright in software
Plant breeders’ rights
Copyright
Rights in performances
Economic rights and moral rights
Publication rights
We would strongly recommend that if you own intellectual property assets you should protect them. You should use specialist intellectual property solicitors, trade mark and patent attorneys to help you with this.
Licence Agreements are used to exploit the ownership of intellectual property and similar rights.
For the owner of intellectual property, licensing is often a good way of profiting from a particular market which it does not have the finance or experience to exploit. From a licensee’s perspective it is advantageous to become a licensee because it can use rights developed and owned by another without having to carry out its own research and development. A licensee’s skills are usually best utilised through its local knowledge, which will hopefully benefit both the licensor and the licensee.
For good reason and not unexpectedly, licensors often strictly control their intellectual property rights through the terms of the licence and are typically weighted in favour of the licensor. But this is not always the case. Where, for example, a licensee is a ‘big player’ in a certain market and without whom the licensor would have little hope of profitable exploitation of their intellectual property then a licensee may well have the upper hand in negotiations.
In general, consider the following if you are either thinking of licensing your intellectual property (IP) or becoming a licensee:
1. What is being licensed?
2. In what geographic territory can the licence exploit the IP?
3. Will the licence be exclusive or sole or non-exclusive?
4. Will there be a right to sub-licence? If so, what will be the controls on this?
5. Will there be an upfront licence fee?
6. Will there be royalty payments? How will these be valued and structured?
7. How will the licensor check on the licensee’s progress?
8. What sort of quality control processes will be put in place?
9. Will there be minimum or maximum sales/production targets?
10. Will there be indemnities? From the licensor and licensee? What for?
11. Will there be warranties? From the licensor and the licensee? What for?
12. Will there be obligations on the licensee and the licensor to protect the IP rights?
13. How will improvements and the associated new IP in the improvements be dealt with?
14. How long will the licence last for?
15. How can the licence be ended?
16. Will there be limitations on liability?
17. Who will take out any relevant insurance? Who will pay for this?
Make sure that if you decide to exploit your IP through a licensee you ensure that you take the advice of a specialist intellectual property solicitor who has experience in preparing and negotiating IP licence agreements. Also make sure that you have checked the trading and business credentials of the licensee to ensure that they can ‘deliver’ on their obligations and therefore create an income stream for you.