Licensee
Candlefocus EditorBy providing a license to use their product or system, the licensor is usually remunerated either through an upfront payment or through revenue sharing arising from the licensee’s activities. Defaulting on the payment or revenue sharing, or using the property or system in a way not agreed upon, can result in an infringement of the licensor’s rights and lead to legal action.
When working with a licensor or a licensee, it is important to be aware of the different types of licenses that may be involved. For example, a franchising agreement is a type of license in which the licensee is granted the legal capacity to conduct business with the licensor’s name and access to the licensor’s system. In this way, the licensee is operating under the licensor’s brand and system, but is a separate and independent business.
In other cases, such as a brand license, the licensee is given the right to produce and market products or services with the licensor’s brand name. These licenses create a partnership between the licensee and licensor and require ongoing agreement between the two parties. Finally, a government license permits either an individual or company to operate within a defined field. A government license typically includes multiple restrictions and requirements which must be met and adhered to, or risk of default or penalties.
In order to fully understand the scope of a licensee agreement and the requirements for each party, it is important to review the agreement and discuss the terms with an experienced attorney. A licensor agreement should ensure that both parties are given the rights and protections they need to ensure the success of their arrangement.