When you’re setting up a new business in the state of New York, a licensing agreement plays an important role in protecting your business interests. While a license allows you to use the services or products of another business for a set period of time, a licensing agreement also involves negotiating the terms and conditions of the deal. This can be a complex task, especially when the licensing agreement involves a high-value transaction.

When negotiating a licensing agreement with another business in New York, there are certain factors that you need to consider to ensure that the agreement is fair and equitable for both parties. Here we look at the top five things to consider when negotiating a business licensing agreement in New York.

1. Define Payment and Renewal Terms

The payment and renewal terms of the licensing agreement are important issues that need to be negotiated carefully. Essentially, you’ll need to agree on how much you’re paying upfront for the license and how often you’ll be renewing the agreement. Be sure to clarify who is responsible for any additional costs associated with the license, such as taxes, storage fees, and other fees. Additionally, make sure that the payment terms are reasonable for both parties, and outline any dispute resolution procedures for any potential payment issues.

2. Possession and Use of Intellectual Property

If the agreement involves the use of intellectual property, such as trademarks, copyrights, or patents, it is essential to clearly define the terms of possession and use. This will involve outlining the specific rights of each party, as well as the duration of possession and use. Additionally, make sure to include language that prevents the other party from the unauthorized use or sale of the intellectual property, as well as any restrictions on the transfer of intellectual property during the term of the contract.

3. Scope of Use

The scope of use of the license should also be outlined in the licensing agreement. This will involve details about the specific activities that the licensee is allowed to do with the license, as well as the duration of the authorized use. Additionally, language should be included to define any prohibitions on the use of the license, such as selling, transferring, or sublicensing the license to another party.

4. Restrictions on Use

Similar to the scope of use, the licensing agreement should also outline any restrictions on the use of the license. This may include language to prohibit the licensee from modifying the license, as well as prohibiting the licensee from using the license for any illegal or prohibited activities. Additionally, any restrictions on the sale or transfer of the license to another party should also be outlined in the agreement.

5. Source of Authority

Finally, you’ll need to be sure to include language to indicate the source of authority for the licensing agreement. This means that you’ll need to specify the entity responsible for issuing the license, as well as any governing body with authority over the agreement. This is important to ensure that the licensing agreement is legally binding and enforceable, and that the parties are not able to transfer the license to another party without complying with the terms of the agreement.

Negotiating a business licensing agreement in the state of New York is a complicated process that requires careful consideration of a variety of factors. It is essential to work with knowledgeable and experienced legal counsel to ensure that the agreement is tailored to your specific needs and is fully compliant with all applicable laws and regulations. An experienced attorney can also help to ensure that all terms and conditions of the agreement are mutually agreed upon by both parties.


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Business Licensing Agreement.