Similar to a lease, a licence agreement allows a landlord to allow another party to use their property for specific purposes and for a certain period of time. However, there are significant differences between a lease and a license agreement. In some circumstances, a licence is more appropriate than a lease. This article describes the key: here we discuss what a license agreement is and how to decide which one is best for you. In order to benefit from a license agreement, the owner must ensure that his agreement with the potential user of the premises is indeed a license and not a lease. This is not necessarily an easy task. If you simply refer to the Agreement as a “License”, this will not be the case. Whether an agreement is considered a licence rather than a lease depends on whether the agreement has or lacks the three essential characteristics of a real estate licence: (1) a clause that allows the licensor to revoke “at will”; (2) the retention of absolute control on the premises by the licensor; and (3) the provision by Licensor to Licensee of all essential services necessary for Licensee`s Authorized Use of the Premises. The licensing agreement gave Starbucks the opportunity to increase brand awareness outside of its North American operations through Nestlé`s distribution channels. For Nestlé, the company had access to Starbucks products and a strong brand image Brand equityIn marketing, brand equity refers to the value of a brand and is determined by the consumer`s perception of the brand. Brand equity can be positive or.
A license agreement is a legal agreement between two parties, called a licensor and licensee. In a typical license agreement, Licensor grants Licensee the right to manufacture and sell goods, enforce a brand name or trademark, or use Licensor`s patented technologies. In return, the licensee generally submits to a set of terms and conditions for the use of the licensor`s property and agrees to make payments called royalties. There are also two different types of license terms. Licensing of subsidiaries. The licensee may or may not be granted the right to allow another person to manufacture or sell his products. This depends on the specific terms of the license agreement. It is important to clearly indicate the period during which the licensee may use the licence area. Although leases are usually long-term, a license is suitable for a short-term contract (e.B. less than 6 months).
A License Agreement is a bipartite agreement (Licensor and Licensee) in which Licensor grants Licensee the right to use Licensor`s brand name, trademark, patented technology, or ability to manufacture and sell goods. In other words, a license agreement grants the licensee the opportunity to use the licensor`s intellectual property. Licensing agreements are often used by the licensor to commercialize its intellectual property. Most often, you will see intellectual property license agreements, electronic patents. B, trademarks and copyrighted material. Common copyrighted materials include music, movies, videos, and works of art. Although a license agreement does not give you ownership of another company`s property, you can use it as long as you follow the parameters described in the agreement. Pay attention to the definitions. Make sure that the product or process is described in a complete and clear manner so that there are no misunderstandings about what is allowed. For a number of its buildings, it unveiled a new type of office space for small tenants who needed smaller spaces.
According to his design, a tenant would have a specific office and would share a photocopier, fax machine, kitchen, and conference rooms. Furniture, carpets, phones, computers and coffee would be provided by the owner. The rooms would be pre-built. The tenant would only have to bring a pencil to be able to work. The Advocate General asked whether it was possible to use a license agreement where he could change the locks or, in this case, turn off the key cards if a tenant defaults. Our firm`s mission was to draft an enforceable license agreement that provides for self-help without having to resort to litigation. This article explains the license agreement – its limits and powers. It also dissects and explains when and how a license agreement is used and the ability to properly engage in self-help.
Do your due diligence before the agreement. Both parties should carefully check the other party. Review business loans and management resumes. Ask for financial statements. Visit the other company`s offices and production facilities. Try everything. In these circumstances, depending on the nature of the damage proven by the former licensee, the owner-licensor can only consider a possible but uncertain triple damage judgment to be a much cheaper cost to do business than the sum of all the costs normally associated with a landlord-tenant dispute. In addition, instead of losing revenue during the self-help dispute, the owner will actually earn income from the payments he or she received from the new site licensee. To use the property of another company, you usually have to pay some kind of royalty. You might be able to pay this in an upfront amount or create a payment plan based on the property`s sales. For example, a license agreement may stipulate that the licensee must pay 1% of all sales to the licensor. If a licensee earns $10 per item, they owe the licensor 10 cents for each item sold.
One of the most important elements of a licensing agreement concerns the financial regulation. Payments made by Licensee to Licensor are generally made in the form of guaranteed minimum payments and royalties on sales. The license fee is usually between 6 and 10%, depending on the respective property and the level of experience and sophistication of the licensee. Not all licensors require guarantees, although some experts recommend that licensors receive as much compensation as possible in advance. In some cases, licensors use warranties as the basis for renewing a license agreement. If the licensee meets the minimum sales figures, the contract will be extended; Otherwise, the Licensor has the opportunity to terminate the relationship. When a party licenses something, they want to make sure it`s being used in the right way. This section of the Agreement describes how Licensee will ensure that this happens. This may include regular quality assurance checks or give Licensor the right to monitor sales.
Exclusive licences are those which create a unique relationship between the licensor and the licensee. With such license agreements, the licensor agrees that the licensee is the only one who can use the intellectual property. These usually cost more for the licensee. Owners must also make judgments about the commercial feasibility of obtaining licenses that are willing to accept license agreements with “at will” withdrawal clauses. The willingness of potential tenant-licensees to sign such agreements may depend on the type of space the owner makes available for licensed use. B for example if the licensed space is a warehouse, a multi-user office suite or a simple storage space. To attract licensees who fear making a significant investment in space conditional on a revocable license, owners may create new financial incentives or include in the agreement a mechanism to compensate a non-defaulting licensee for the remaining undepreciated value of their investment if the licensor invokes the “at will” clause of the agreement. License. The license itself is described, with details on the deadlines for the period (one year?), the scope (US, world?) of the license and the assertion of exclusivity. Details of what the licensee can do with the license (manufacture of the products it uses, sale, sub-license, distribution and export, etc.). Licensees and licensors like to be thorough in their agreements to ensure that nothing is overlooked.
Both parties need to know what rights they have in relation to this relationship. .