Aspects of licensing agreements
In addition to using industrial property rights yourself, the granting of licenses represents a further important means of exploiting property rights commercially. To enter into successful licensing agreements, it is necessary above all to identify provisions that are realistic from an economic point of view. These are characterized in particular by the fact that the licensee is actually motivated to use the property right or rights extensively. In addition, the risks inherent to the property rights must be described realistically in the licensing agreement. It should be clarified for example, what happens if a property right subsequently turns out not to be legally valid. In situations like that, a fair balancing of interests is advisable.
The licensing income that can be obtained by the proprietor of the property rights and licensor, as well as the fact of a protected entry onto the market for the licensee, are already very strong motivations for entering into a licensing agreement. However, there are more arguments in favor of entering into licensing agreements: licensing agreements can cement long term alliances or relationships of dependency between companies. Farsightedness is a key precondition for success in this regard, even before the actual negotiations on the wording of the agreement begin. Our tip is to have a “Letter of Intent” with clear provisions which include the scenario of the negotiations ending in failure.
We have assisted many clients in successfully using their property rights by the granting of licenses. In this regard, our insight into industry and our knowledge of markets are of particularly great strategic value. Our knowhow will also be useful to you in the context of entering into licensing agreements.