Licensing Agreement

In order for a company to market or sell a patented product, design, name or brand, there needs to be a legal licensing agreement in place. This agreement gives a third party the right to market and sell items that belong to someone else without fear of violating existing patent laws.

There are numerous different licensing agreements in place today, some of which are more familiar than others. Most people are familiar with software licensing agreements but may not be aware of an OEM license, an end-user agreement or a non-software licensing agreement. However, ignorance of the law is not a valid defense when it comes to selling material that is protected by patent or copyright law. Before you enter into a business arrangement that requires you to market products manufactured by others, contact a Chicago attorney to establish a formal licensing agreement.

How to Set up Licensing Agreements

Ideally, both you and the patent holder can meet with an attorney together. The attorney should gather information from the patent holder to establish exclusivity rights. This means that the patent holder grants unlimited rights to one party or allows multiple license holders to have access to the product or design. The contract should also specify the geographic location where the license holder can market or sell the patented product as well as establish a royalty fee schedule. It is also important to determine which type of license agreement is being granted.

Software License Agreement

Most people have purchased personal software at some point, but they may not realize that they were agreeing to a software license agreement just by using the product. The agreement gives the user permission to use the software program, provided he or she does not attempt to duplicate or sell the program. If multiple people will be using the software program, each one is required to purchase the software separately.

End-User License Agreement

When a reseller or supplier sells a product, the person who purchases it is usually the end-user. There are a variety of products that fall under this category, not just computer software programs. Prior to selling the product, the reseller or supplier must have an agreement in place with the original manufacturer.

Non-Software License Agreements

This agreement pertains to any type of product and is most often found in the business environment. For example, a restaurant owner must purchase the right to sell certain kinds of soft drinks in his or her business. Although the owner earns profits from selling the soft drinks to customers, he or she must also pay a fee to the original manufacturer for the right to use a product name that is protected by trademark laws.

Original Equipment Manufacturer (OEM) Laws

If a company requires parts manufactured by another company to create its products, it must procure an OEM agreement first. Once the OEM has been obtained, the first company can sell products that contain parts made under the brand name of the company that supplied the parts and promote it as its own.