A License is a contractual right that gives someone permission
to do a certain activity or to use certain property that is owned by someone
else. In an Intellectual property license, one company grants permission to
another to use its Intellectual property, to which it has exclusive rights.
A License allows an intellectual property rights holder (the
licensor) to create a business from an invention or creative work by charging a
user (the licensee) for product use. It also helps to control, manage and
protect the intellectual property.
In
Intellectual property, Licensing agreement is a written contract under which
the owner of a copyright, know how, patent, service mark, trademark, or other
intellectual property, allows a licensee to use, make, or sell copies of the
original. Such agreements usually limit the scope or field of the licensee, and
specify whether the license is exclusive or non-exclusive, and whether the
licensee will pay royalties or some other consideration in exchange. While
licensing agreements are mainly used in commercialization of a technology, they
are also used by franchisers to promote sales of goods and services.
A
variety of such licensing agreements are available, which may be broadly
categorized as follows:
·
Technology
licensing agreement: By a technology licensing agreement the licensor
authorizes the licensee to use the technology under certain agreed terms and
conditions. It is, therefore, a contract freely entered into between two
parties and contains terms and conditions so agreed. Therefore, if any Small
and medium size enterprises (SME) is interested in improving the quality of its
product or manufacturing a new product by using the rights owned by others in
the form of a patent, utility model, or know how protected by a trade secret
then acquiring such rights through a licensing agreement is the right solution.
·
Trademark
licensing and franchising agreement: A trademark license is an arrangement
by which the licensor consents to the use of its trademark by the licensee on
agreed terms and conditions. A
franchising agreement is granted by the franchisor to the franchisee to use its
trademark and the franchised system. Therefore, if any SME is interested in
marketing the product or service, and the brand (trademark) of that product, is
owned by others or, entering and expanding the existing market for the product
or service for which the SME owns the right conferred by a trademark then
considering a trademark license or a franchise agreement is the right solution.
·
Copyright
license agreements: The Copyright License Agreement is an agreement between
the owner of the copyright in any existing work or the prospective owner of the
copyright and the company or individual in any future work in writing to
another person for a limited time. This license should not be mistaken with an
assignment. Therefore, if any SME is interested in manufacturing, distributing
or marketing the results of the literary and artistic efforts of creators or,
entering a market or expanding or extending the existing market for the
literary and artistic efforts of the enterprise, then considering a copyright
license agreement is the right solution.
However, in practice, all or some of these agreements often form part of
one single contract, since, it involves not only the intellectual property
rights but many other rights also.
Under the Trademark Act 1999, the assignability and transmissibility of
trademark are covered from Section 37 to Section 45.Section 37 of the said Act
deals with the power of the registered proprietor to assign the trademark; and
the assignability and transmissibility of registered and unregistered trademark
whether with or without the goodwill of the business concerned is covered under
Section 38 and Section 39 of the Act respectively. The registration of the
assignment comes under the purview of Section 45 of the said Act.
In International context, a formal licensing agreement is possible only
if the intellectual property right that is wish to license is also protected in
the other country or countries, and, if the intellectual property is not
protected in such other country or countries then the property would not be
license and also there would be no legal right to put any restriction on its
use by anyone else.
