Frequently Asked Questions

What are the roles and responsibilities of each party in a licensing agreement?

A licensing agreement is a legal contract that outlines the roles and responsibilities of both parties involved. The party granting the license, known as the licensor, owns the intellectual property (IP) and gives the licensee the right to use this IP for a specified period. The licensor retains the rights to the property throughout the term of the agreement and often restricts the licensee's rights to sell products based on the licensed property in certain geographic areas. The licensor also sets quality control standards to ensure that any product created by the licensee maintains the standard of excellence associated with the brand. The licensee, on the other hand, is granted permission to use the licensor's IP, usually in exchange for an upfront payment or royalty payments throughout the duration of the agreement. The licensee must adhere to the terms of the agreement, including the geographic areas of interest, the length of the license term, and the quality control standards set by the licensor. The licensee may also have the right to sublicense their rights to other parties, depending on whether the license is exclusive or non-exclusive.