Product Licensing Agreements - The Fundamentals

Product Licensing Agreements - The Fundamentals

Product licensing agreements, whether the product is software program, hardware, or simple Intromark consumer goods, center around two major authorized areas: contract legislation and trademark law. The contract part of the agreement is pretty apparent while trademark is an added necessity on this fashionable age (the place usually up to 90% of a product's value consists of the identify or brand on its packaging).

The distributor license - a typical product licensing agreement - is a sophisticated agreement whose drafters must take additional care to delineate every get together's rights and duties else pricey litigation is the certainfire finish-result.

This is what a typical distributor agreement should have:

1) The events (clearly).

2) The Providers: It is a detailed description of each party's duty to the other. For example: Occasion A agrees to distribute software program in New York for get together A. In return, Celebration B agrees to not license any other events to distribute the software in New York. Perhaps celebration B will also be answerable for updating and providing buyer warranties for the software program? That is ultimately up to the parties...

3) The Cost: Who pays whom? At what intervals? What are the penalties for late payments? Who is liable for dealing with the tip-consumer, amassing on invoices, etc...?

4) Additional Warranties: This is where the parties make extra guarantees to one another. That is also where an excellent attorney will anticipate and supply for as many contingencies as possible: ought to an unanticipated contingency occur, pricey litigation becomes inevitable (e.g., the distributor's state passes a new tax on the type of product distributor sells and the agreement fails to supply which occasion bears the burden of this new tax). Finest Recommendation: Don't rely on Googled forms, particularly for giant worth agreements; hire a lawyer who is aware of your industry and, due to this fact, knows what can go wrong.

5) Proprietary Rights: That is the trademark regulation section. The agreement ought to clearly state which intellectual property belongs to which party. After a number of years of working collectively and using one another's logos on your products, the strains between who owns what can get blurred...

6) Limitation on Legal responsibility: This is normally normal language where each social gathering agrees to not hold the other liable for traditional failures below the agreement (you may't disclaim non-standard failures, like setting fire to the warehouse).

7) Time period (time): This is self-evident.

eight) Termination: That is also crucial and requires sound legal counsel. How a relationship terminates and what persevering with rights and tasks the parties have are just as vital and litigation-susceptible as how the agreement begins.

9) Arbitration and Choice of Legislation: These are optional however extremely recommended. A powerful arbitration clause will make sure that any disagreements go to arbitration. While arbitration can get expensive, such costs don't come close to the years-long engagement of motion apply, discovery and appeals you see in traditional litigation.

In sum, the principle aim of a effectively-drafted agreement is to provide for as many contingencies as doable in order to avoid future disputes and positively to keep away from pricey litigation over such disputes.