Frequently Asked Questions

How is the length of a licensing contract determined and what happens when it expires?

The length of a licensing contract is determined by the agreement between the two parties involved. It is one of the common elements found in practically every licensing agreement. The licensing contract grants a licensee the rights to the intellectual property of an owner for a stipulated period of time. This period can vary depending on the nature of the intellectual property and the terms agreed upon by both parties. In some cases, the agreement may contain provisions for renewal. When a licensing contract expires, the rights granted to the licensee by the owner of the intellectual property cease. If there are provisions for renewal in the agreement, these may be triggered by the licensee meeting certain conditions, such as realizing agreed upon sales goals. If the contract does not have a renewal clause or the conditions for renewal are not met, the licensee loses the right to use the intellectual property. The type of licensing agreement, whether exclusive, limited exclusive or non-exclusive, can also influence the length of the contract. For instance, in an exclusive licensing agreement, the licensee may have the rights to the intellectual property for a longer period compared to a non-exclusive agreement.