License Agreement Cost
Prepare the property first. If you are selling or buying a license for a product, make sure that ownership of that product is clearly stated in the agreement. Also, make sure that no one else uses the asset (z.B. a trademark) and that the trademark is registered or subject to copyright registration. You don`t want to enter into a licensing agreement and find out that someone else is questioning the property. I mentioned in the last column that many design-oriented companies (such as large European furniture and furniture companies) often do not provide substantial paychecks. You can be good for the wallet, but not the paperback. This is largely due to the lack of material intellectual property that is proposed for the license. Much of what sells is not particularly new.
Look at the similarities in the Crate and Barrel, West Elm, Room and Board, Restoration Hardware product lines — these companies follow the same basic market, and if you have a successful product, the others follow with their own releases. If someone has a franchise, there may be a licensing agreement, and there may be several types of licenses within the franchise. For example, a McDonald`s franchise could include licenses for the use of the McDonald`s logo on products and packaging and another license for the manufacture of its patented processes or ingredients. Sometimes the licensed item is pretty much the mark. Dee and Mark Wanger are co-founders and co-owners of Ridekick International in Fort Collins, Colorado, which manufactures a power trailer that adds a 20 km/h boost to adult bikes and trikes. Ridekick is the exclusive licensee and pays a fee to the inventor who did not want to start a business himself. «This licensing opportunity is the channel that helped us start our own business,» wanger says. Ajmal «AJ» Saleem, owner and director of Suprex Learning in Houston, licensed an online practical testing software called Test Innovators. «The license gives us an advantage,» he says. «Technology assesses academic weaknesses very quickly and allows parents to make progress, so the costs are worth it.» In a typical licensing agreement, the licensee undertakes to make intellectual property rights such as technology, brand name or licensee know-how available to the licensee.
In exchange for the intellectual property of the licensee, the purchaser usually plays the donor a pre-feeding and/or a licence fee. A licence fee is an ongoing fee paid for the licensee`s right to use intellectual property. Check the rules of the state. Depending on the type of product sold and to whom it is sold, there may be restrictions for the licensee. For example, some products (such as weapons) may not be sold in certain U.S. countries or states. The surprise is often the reaction of initial licensees when they see the fees, says Jack Morrow, president of Out of the Box, a Los Angeles agency that represents both licensees and IP owners. Royalties are generally between 4 and 14 per cent for each license item you sell and a minimum annual licence payment, part of which is due at the time of signing, must be guaranteed. In other words, you`d better trust customers. The main purpose of an IP licensing agreement is to give entrepreneurs permission to do what they want and need. The risk is that if you are not competent enough to establish the appropriate authorizations – in terms of duration and usage parameters, for example – you are asking for trouble, says Marc P. Misthal, lawyer and shareholder at Gottlieb, Rackman-Reisman, an IP law firm in New York.
«If you concede a photo for use on your website and brochure, you can`t legally use it on an advertising backpack,» he explains, noting that such usage assumptions are typical of licensed neophytes. «You can`t make a good deal if you don`t know what you want.» Consider the others «What-Sis.