Many New Jersey area residents have created intellectual property. Intellectual property is property that is not something you can hold. It refers to property that is intangible. Intangible assets can include art, logos, inventions, music, and designs. For those who create this type of property it is extremely valuable and needs to be protected. Those who have intellectual property may understandably want to profit from it.
One way to make money from intellectual property is to license it for another entity to use it. It could be a piece of music that another company uses in its commercial, a copyrighted photograph on a website, or the right to manufacture a patented product. A license allows someone else to use the intellectual property while the creator receives compensation. There are some things a person should consider before signing a licensing agreement.
What a licensing agreement should include
A licensing agreement should be understood by both parties and enforceable in the courts if necessary. It should include:
- License scope. What kind of access does a licensee have with the intellectual property. Do they have unlimited access to do whatever they want or can they use the license in just a certain way. For example, with a photograph, a license may restrict what a company can do with an image, how long they can display an image and if the creator’s name needs to be somewhere on the image.
- Revenue is another item that needs to be worked out in a licensing agreement. It could be a one-time license fee or a recurring fee.
- Length of license agreement
- Prohibited uses of the intellectual property
- Enforcement if a person doesn’t receive payment
- Warranties associated with the property
A legal professional who is skilled in intellectual property can help their client draft a licensing agreement that is fair and legally sound.