Intellectual property plays a critical role in business and in the corporate and transactional matters that are key to growth. In the intellectual creativity cycle, there is a growing trend of emphasizing not only “creation” and “protection”, but also the “utilization” of Intellectual Property (IP) – patents, designs and trademarks, etc. In implementing IP transactions, legal minds are indispensable, but the final goal cannot be achieved without also using business minds.
A licensing agreement is an agreement between the owner of an intellectual property (IP) asset and a different person who is authorized to use the asset’s rights, upon payment of an agreed price (fee or royalty). Licensing may imply allowing the use of several faculties granted by copyright, patent, design, technical know-how, trademark, or specialized marketing.
The licensee and the licensor stipulate the specific purposes for which the intellectual property (IP) rights will be used or sold, and it is common to negotiate what territory or length of time they are limited to. This licensing does not mean purchasing a product only to resell it or keep ownership of IP assets, but rather a payment to obtain an exclusive and legal right to use or sell it.
Intellectual property transactions can be an excellent way to increase your assets, especially if you do not feel able to or have enough experience to develop your product or service in the market.
Depending on what you need and the type of intellectual property asset, you can choose usually from the following: technology licensing of patents or designs, trademark licensing, franchising agreements, copyright licensing.
For example, a franchise agreement (or Franchising), allows for a fast and decentralized expansion of a business supported by intellectual property (IP) assets. The agreement transfers the rights to use and sell IP assets, including trademarks, patents, designs or know-how for a determined period of time and upon payment of a fee (royalty).
In IP transactions matter, it is very important on one hand to maintain a due diligence support, meaning the assessing of the status of IP portfolios to increase the agreement’s transparency and the available information, and to enhance the licensing process. Due diligence in the IP context should include an investigation directed toward identifying and assessing risks associated with a transaction and the consideration of what action, if any, should be taken to address such risk.
Using due diligence will help you establish the proper value of assets prior to completion of the deal. Research gives you information concerning the management of IP by the owner of the targeted assets. It also provides the buyer with enough information to permit meaningful investigations to be completed on the targeted assets.
But, on the other hand, it is paramount to assure a constant vigilance: once your patent or any other IP right is acquired, it is important to be vigilant against anyone who might be misusing your inventions or your trademark for instance.
Each type of IP (e.g. patents, trademark, copyright, trade secrets) has it own pitfalls. A skilled intellectual property lawyer will help you successfully navigate what constitutes due diligence for each respective type of IP, and help you get the most out of your sale or purchase of your intellectual property. We’ll write, organize, and integrate every record, so as to ensure your business maximum profitability.
