Formal registration of intellectual property helps businesses protect valuable resources against misuse and infringement. Registering trademarks and copyrights can facilitate easier enforcement of intellectual property rights when a violation occurs.
Typically, those who have registered a copyright or trademark have exclusive use of that protected intellectual property and can control attempts to monetize it. However, businesses sometimes negotiate licensing agreements with outside parties. Creative professionals and outside businesses might ask for legal permission to use protected intellectual property for commercial purposes.
What are the potential benefits of a business agreeing to license protected intellectual property?
1. A new revenue stream
Licensing agreements generally include provisions for financial compensation. The payment for the licensing agreement may be an upfront fee or might relate to the number of units sold or manufactured. Licensing can be a way to diversify a company’s revenue streams.
2. Reduced infringement risk
Parties interested in accessing protected intellectual property may find workarounds, such as fair use provisions, in cases where a licensing agreement isn’t possible. Companies hoping to protect original creations from infringement may benefit from offering licensing arrangements to outside parties instead of investing time and effort in enforcement actions later.
3. Increased exposure
When a musical artist samples an older work, the release of the new song could drive interest in the sampled work as well. The same is true for many other licensed uses in new works. Licensing agreements can attract public attention to a brand or a creative work.
Licensing agreements generally need to be thorough and must contain customized details to adequately protect the party authorizing outside use of protected intellectual property. Discussing potential licensing opportunities with a skilled legal team could help business leaders protect their intellectual property while simultaneously gaining the benefits that come from a formal licensing arrangement.