International Licensing Agreement: What You Need to Know
An international licensing agreement is an essential part of global business and enables a company in one location to gain the direct market access of another.2 min read
Choosing Your Venue
One of the most overlooked portions of a licensing agreement is identifying a venue that will handle dispute resolution. Most countries will allow the licensee to determine the venue and if none is chosen, the licensee's home court will be used. This is not the same in every country, so it is always important to err on the side of caution and choose a dispute resolution venue in the United States. No matter what you choose, it is always best to choose a venue that has the best laws to fit your needs.
Clearly Identify Who Is Allowed to Use the Protected Item
There should be a section in your agreement that clearly states all parties that are authorized to utilize the protected items that are listed in the agreement. This can be a vital component if a dispute arises and parties begin to blame each other if a breach does occur. You need to make sure to include the authorized parties in both companies so you will be able to find where a breakdown occurs and who bears responsibility if it happens.
A good choice to make for an authorized person is the head of marketing. Marketing department heads will often be the ones who track the use of the protected items and will most likely oversee those who have access to it.
Set up Your Contract to Automatically Survive
Many contracts are set up with a future end date. To ensure your ongoing protection, you should create a survival clause in your contract. It is also important to make sure that you regularly meet, even if the contract seems to be working fine. You should treat the agreement as a continuing relationship that requires nurturing and working together to ensure goals are met.
License agreements are an important asset for businesses to own, and when a company is being acquired, it can be one of the things the acquiring party is seeking. You can add some amazing financial value to the contract by including a section that gives the party the right to assign the agreement to the other side. That way all parties can enjoy the benefits of the contract even if they are sold. What's even more important is that both parties will have the protection to veto the assignment of the contract if they are not comfortable with the new party.
What is Licensing?
Licensing is an agreement that allows another company to use protected materials such as:
- Intellectual property
The licensee will not be involved in the manufacturing of the product but will be given a fee in exchange for its use.
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