License Agreement for your Invention?
The purpose of a license agreement is to grant another individual, company or corporation the right to use your intellectual property for a specific amount of time and for a specific purpose. The specifics are outlined in the terms of the agreement.
A licensor may grant license under "intellectual property" to do something (such as copy software or use a patented invention) without fear of a claim of intellectual property infringement brought by the licensor.
A license under intellectual property usually has several parts including a term, territory, renewal, as well as other limitations deemed vital to the licensor and licensee.
Many license agreements are valid for a particular length of time protecting the licensor should the value of the license increase, or market conditions change.
Product Royalties
Royalties are payments made by one party (the "licensee") to another (the "licensor") for ongoing usage of an asset, usually an intellectual property (IP) right. The royalty for a given case is determined by many factors including: market drivers and demand structure, territorial of rights, exclusivity of rights, inherent risk, strategic need, fundability, deal structure, level ofinnovation, stage ofdevelopment, sustainability of the product, and availability of similar technologies.
Navigating through the royalty terms is important. You commonly have both an advance royalty, which is a flat fee paid upfront, and ongoing royalties, which are paid as a percentage of every sale you make. The advance royalty is basically a guarantee that thelicensor will get some money even if your product does not sell. Then, if and when yourproductsells, the licensor will get a percentage of thesale on average, about 5 percent of the wholesale price of each product sold.
The licensor usually decides what the royalties will be, and those rates are pretty firmly set. So make sure you understand what they are and that they are spelled out in your licensing agreement to avoid any surprises later. In fact, that agreement is crucial in determining not only what the licensor receives, but also what rights you get.
The purpose of a license agreement is to grant another individual, company or corporation the right to use your intellectual property for a specific amount of time and for a specific purpose. The specifics are outlined in the terms of the agreement.
A licensor may grant license under "intellectual property" to do something (such as copy software or use a patented invention) without fear of a claim of intellectual property infringement brought by the licensor.
A license under intellectual property usually has several parts including a term, territory, renewal, as well as other limitations deemed vital to the licensor and licensee.
Many license agreements are valid for a particular length of time protecting the licensor should the value of the license increase, or market conditions change.
Product Royalties
Royalties are payments made by one party (the "licensee") to another (the "licensor") for ongoing usage of an asset, usually an intellectual property (IP) right. The royalty for a given case is determined by many factors including: market drivers and demand structure, territorial of rights, exclusivity of rights, inherent risk, strategic need, fundability, deal structure, level ofinnovation, stage ofdevelopment, sustainability of the product, and availability of similar technologies.
Navigating through the royalty terms is important. You commonly have both an advance royalty, which is a flat fee paid upfront, and ongoing royalties, which are paid as a percentage of every sale you make. The advance royalty is basically a guarantee that thelicensor will get some money even if your product does not sell. Then, if and when yourproductsells, the licensor will get a percentage of thesale on average, about 5 percent of the wholesale price of each product sold.
The licensor usually decides what the royalties will be, and those rates are pretty firmly set. So make sure you understand what they are and that they are spelled out in your licensing agreement to avoid any surprises later. In fact, that agreement is crucial in determining not only what the licensor receives, but also what rights you get.
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