What Is Product Licensing Agreement

Other key players in the world of product licensing include media and gaming real estate, professional and university sports teams, and food and beverage companies. The product license is likely responsible for your favorite sports jersey, your child`s beloved toy line, and the characters in your favorite video game. Each has its own reasons for using the product licensing business model, but all of them are reaching new customers, expanding their product offering beyond their internal capabilities. 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. Licensing agreements cover many factors, including the following: Those entering into a licensing agreement should consult a lawyer as there are complexities that are difficult to understand for those who do not have a thorough understanding of intellectual property law. Research sources There are a large number of sources that can be used and contacted when researching products/processes, etc. under license: the licensing agreement gave Starbucks the opportunity to increase brand awareness outside of its North American operations through Nestlé`s distribution networks. 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.

The fashion industry also has a long history of product and merchandise licensing. Today`s well-known designer brands such as Ralph Lauren, Michael Kors and Vera Wang rely on licensees to expand their product lines and present a complete lifestyle offering to their customers. Although Mr. Kors or Ms. Wang may create their eponymous clothing collections themselves, they often outsource the production of other product categories into the portfolio of a contemporary lifestyle brand. Accessories such as hats, ties and others are regularly manufactured by licensees, as are household products, shoes, perfumes, glasses and many others. You can license the right to manufacture a product from a patent you own or give someone the right to use one of your trade secrets, as a process developed by your company. Each license agreement is unique and these agreements vary depending on the type (copyright, trademark, patent, etc.). In general, you will find these sections in most license agreements: Product licenses can be the best kept secret in business. This practice allows countless brands to expand their product offerings while tapping into additional revenue streams. And while many of our friends, family, and even colleagues in other departments may not be able to give a definition of product licensing, there`s no doubt that some of their favorite products are licensed — and they probably don`t even know it.

The benefits of licensing can be viewed from two angles: the licensor and the licensee. In addition to detailing all the parties involved, the license agreements detail how the licensed parties are allowed to use the properties, including the following parameters: If you continue with a license agreement, you may find that your business grows rapidly. The question of where to look for a license depends largely on: Christian, Glynna K. “Joint Ventures: Understanding licensing issues”. The License Journal. October 2005. There are a few important pros and cons to consider when licensing a product. The following list should help you determine if the pros outweigh the disadvantages of your situation. Exclusivity and territory.

The licensee is granted the exclusive right to manufacture and sell the product in a specific territory. Licensor agrees not to allow anyone to sell the Product in this territory. This part of the agreement is usually associated with a term. License agreements ensure that you have legal permission to use another person`s or company`s property. For example, if you were to use an artist`s song in an advertisement, you`ll need to sign a license agreement to do so legally. If you use the song without permission, you may violate copyright laws and risk being sued or fined. A licensor decides on the license fee and the prices are set in stone. For this reason, you need to know what the prices will be and how they are listed in the agreement to avoid confusion. If you are not clear about the terms of a license agreement, you should hire a lawyer to provide additional assistance. The support you receive will save you money in the long run, so you can accept a license agreement that works in your favor. If you are put off by the idea of royalties, know that all parties will benefit from the agreement. Product licensing involves two parties: a licensor and a licensee.

Licensor owns the rights to certain intellectual property (IP), while Licensee manufactures products using intellectual property granted by Licensor through a license agreement. A product (or merchandise) license allows licensees to use popular intellectual property to create branded products, usually for a period of time. Another important element of a license agreement sets the company`s schedule. Many licensors insist on a strict go-to-market date for products licensed to external suppliers. After all, it is not in the best interest of the licensor for a company that never markets the product. The license agreement will also include provisions on the duration of the contract, renewal options, and termination terms. A license agreement is a written agreement between two parties in which one owner allows another party to use that property under a certain set of parameters. A license agreement or license agreement usually involves a licensor and a licensee.

Explain the monitoring and quality assurance process. There should be an initial test sample of the product, which must be approved before the products can be manufactured. The quality of the product should be checked regularly. The monitoring of product sales should be the subject of a call for tenders. Who determines the price of the product? Can products be reduced? Companies looking to increase market share and revenue through licensing would also often benefit from more “indirect” types of awareness and positioning KPIs, as licenses would maximize brand exposure and foster brand loyalty. .