CHAPTER 21
Licensing Contract take a step beyond the mere sale of goods. These arrangements involve the sale of intellectual property to a local party who makes the goods in compliance with the licensing agreement. The licensing arrangement differs from a franchise in two major ways. First, the licensee makes the products sold, while the franchisee purchases the goods from the manufacturer. Second, the franchise involves an entire business structure, while a license allows the licensee more discretion over the business operation.
LICENSING ARRANGEMENTS
Sample Contract: Licensing Agreement This Agreement is made on [date] between [name], [a/an] [individual or type of entity and nationality or place of formation] of [address] (the “Licensor”), and [name], [a/an] [individual or type of entity and nationality or place of formation] of [address] (“Licensee”).
The agreement binds the parties who sign it, and these should be identified here. To ensure that there is no misunderstanding, the full name and business address of each party should be given. If a party is an entity—partnership, corporation, limited company, or otherwise—the type of entity should be disclosed here. In international contracts, the description of each party includes the party’s nationality. Examples of descriptions: “a Société Anonyme organized and existing under the laws of France,” “a partnership organized and existing under the laws of the State of California in the United States of America,” or “an individual who is a citizen of Singapore.”
COMMENT:
RECITALS A.The parties acknowledge that the Licensor owns exclusive rights in the intellectual property shown in the list attached to this Agreement (“Intellectual Property”). B. The Licensee desires to manufacture and sell [type of goods] (“Goods”) carrying the Licensor’s Intellectual Property in [state and/or country] (“Territory”).
The recitals are preliminary provisions that set out the intent of the parties, and sometimes definitions—such as of the goods—of terms used in the contract.
COMMENT:
Therefore, the parties agree as follows: AGREEMENT 1 . G R A N T O F L I C E N S E . The Licensor grants to the Licensee the license and authority to use the Intellectual Property on and/or in connection with the
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