Home Strategy Business Licensing Arrangement

Licensing Arrangement

popular post

Make an Avatar with Adobe Photoshop

"Avatar" is a simple word which means "descent, alight, to make one's appearance", and refers to the embodiment of the essence...

How to Design A Watch with Illustrator

How to Design A Watch with Illustrator As we know Adobe Illustrator is a designing application.We can design anything with...
video

Glass Ball Tutorial in Photoshop

  https://youtu.be/LzjmZFxjRKA

A simple freelancing guideline for beginners

A simple guideline for freelancing Freelancing is a mostly used word in current world. Since Freelancing is a independent profession...

How to Use AutoCAD Keyboard Shortcut Command

Today we are going to show How to Use AutoCAD Keyboard Shortcut Command. Since AutoCAD is a designing application...

Licensing Arrangement

A licensing arrangement is an agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product. The license pays compensation to the licensing firm in return for technical expertise. A contractual arrangement in which the legal owner grants another permission to use intellectual property such as a brand. For example, a well-known regional real estate firm may reach a licensing agreement for another company to use the firm’s brand name in a different region of the country. Licensing is especially useful strategy if the trademark or brand name is well known, but the multinational company does not have sufficient funds to finances its entering the country directly.
Contractual agreement between two business entities in which the licensor permits the licensee to use a brand name, patent, or other proprietary right, in exchange for a fee or royalty. Licensing enables the licensor to profit from the skills, expansion capital, or other capacity of the licensee. Licensing is often used by manufacturers to enter foreign markets in which they have no expertise. The creators of popular comic strip and movie characters often license the use of a character’s likeness to manufacturers of lunch boxes, clothing, toys, and other children’s products. The popularity or familiarity of the character helps otherwise undistinguished products to stand out from their competitors.
A license is a permit granted by a government to carry out a regulated activity. Licensing is the most common form and method of health regulation. Most licensing in the United States is done by the states under their police powers. A state legislature must pass a law requiring a license to engage in a specific activity, such as practicing medicine or preparing food. The statute delegates the power to establish the conditions for licensure to an agency such as a department of health, or to a board such as a board of medical examiners. The agency publishes the conditions for licensure, which are often based on national codes, and every license holder must meet these standards. A license holder can be required to give up certain legal rights as a condition of licensure, such as agreeing to allow inspectors into a restaurant without a warrant. A license can be revoked or limited for not complying with the terms of licensure.
The arrangements between the licensor and the licensee are typically laid out in a legal document known as a licensing agreement. This formal agreement is an important component in a successful business venture. “While it is impossible to determine the future success of a product, much can be done in the earliest stages to ensure that a licensed product gets the best chance possible,” Salas wrote. “One might even say that the entire future of a licensed product is laid out, at least in part, during the process of negotiating a licensing contract.”
Licensing agreements usually include a number of provisions designed to protect the interests of both parties. Some of the most common elements of licensing agreements are outlined below:
Financial Provisions:
Payments from the licensee to the licensor usually take the form of guaranteed minimum payments and royalties on sales. Royalties typically range from 6 to 10 percent, depending on the specific property involved and the licensee’s level of experience and sophistication. Not all licensors require guarantees, although some experts recommend that licensors get as much compensation up front as possible. In some cases, licensors use guarantees as the basis for renewing a licensing agreement. If the licensee meets the minimum sales figures, the contract is renewed; otherwise, the licensor has the option of discontinuing the relationship.
Time Frame:
Many licensors insist upon a strict market release date for products licensed to outside manufacturers. After all, it is not in the licensor’s best interest to grant a license to a company that never markets the product. The licensing agreement will also include provisions about the length of the contract, renewal options, and termination conditions.
Quality Control:
In order to ensure quality, the licensor may insert conditions in the contract requiring the licensee to provide prototypes of the product, mockups of the packaging, and even occasional samples throughout the term of the contract. Another common quality-related provision in licensing agreements involves the method for disposal of unsold merchandise. If items remaining in inventory are sold as cheap knockoffs, it can hurt the reputation of the licensor in the marketplace.
Next articleGlobal Village

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Must Read

How to configure Network Information Systems

How to configure Network Information Systems What is NIS? NIS, or Network Information Systems, is a network service like LDAP that allows authentication and login information to be...

How to configure samba server step by step

configure samba server step by step As a LINUX administrator. When you think Windows Server , You should also think Samba Server. Samba is a...

How to recover lost data: Setting up RAID

Setting Up RAID  A Redundant Array of Independent Disks (RAID) is a series of disks that can save your data even if a terrible failure...

How to configure Dynamic Host Protocol

Dynamic Host Configuration Protocol One of the basics elements found on all networks is a Dynamic Host Configuration Protocol (DHCP) server, making it an important...

Applying the Balanced Scorecard to E-marketing

Applying the Balanced Scorecard to E-marketing Metrics for the Customer Perspective: The most important of these metrics measure customer loyalty and lifetime value. However, many...