Which of the following Statements Is True of a Licensing Agreement

The licensing agreement gave Starbucks the opportunity to increase brand awareness outside of its North American operations through Nestlé`s distribution channels. For Nestlé, the company had access to Starbucks products and a strong brand image Brand equityIn marketing, brand equity refers to the value of a brand and is determined by the consumer`s perception of the brand. Brand equity can be positive or. Starting in 2020, there are several ways to license software with different types of licensing models that allow software vendors to flexibly benefit from their product offerings. A licence is granted by one party to another party under an agreement between those parties. In the case of a licence issued by a government, the licence is obtained by application. In the case of a private party, this is done through a specific agreement, usually in writing (e.B. a rental agreement or another contract). The simplest definition is “A license is a promise not to sue,” because with the exception of a marriage license (which only grants official recognition of the relationship between the two people), a license allows either authorized party to engage in illegal and prosecuted activity without a license (for example. B, fishing, driving a car or operating a radio or television station), or it allows the Licensed Party to do anything that would infringe the Rights of the Licensed Party (for example.

B make copies of a copyrighted work) that the Licensed Party could sue under civil, criminal or both law without the License. In a typical license agreement, the licensor undertakes to provide the licensee with intellectual property rights such as the licensor`s technology, brand name or product creation know-how. In exchange for licensor`s intellectual property, licensee generally pays an upfront fee and/or license fee to the licensor. A licence fee is a continuing royalty paid for the right to use the licensor`s intellectual property. Mass-distributed software is used by individuals on PCs licensed by the developer of such software. Such a license is typically included in a larger End User License Agreement (EULA) that is entered into when this software is installed on a computer. Typically, a license is associated with a unique code that grants the end user access to the software in question once approved. A license agreement is an agreement in which a licensor grants another company the right to intangible ownership for a certain period of time, and in return, the licensor receives a royalty from the licensee. Intangible assets include patents, inventions, formulas, processes, designs, copyrights and trademarks.

[8] Licensing is a business agreement in which a company grants permission to another company to manufacture its product for a specific payment. Licensing usually involves another company using patents, trademarks, copyrights, designs, and other intellectual products for a percentage of sales or fees. It`s a quick way to generate revenue and grow a business, as there`s no manufacturing or distribution involved. Instead, licensing typically means using an existing company`s pipeline and infrastructure in exchange for a small percentage of revenue. In May 2018, Nestlé and Starbucks entered into a $7.15 billion coffee license agreement. Nestlé (licensee) has agreed to pay $7.15 billion in cash to Starbucks (the Licensor) for the exclusive rights to sell Starbucks products (single-serving coffee, tea, bean bags, etc.) worldwide through Nestlé`s global distribution network. In addition, Starbucks receives royalties on packaged coffees and teas sold by Nestlé. Under a pure license agreement, the licensor may, in accordance with its terms and general law, terminate the contract at its discretion and without giving reasons, unless it is related to an interest or made irrevocable by contract. A license that has been coupled with an interest cannot be revoked by the licensor without incurring liability and potential damages. In the event that a licence is associated with an interest, the licensor shall grant the licensee a reasonable period of time to remove that interest from the property prior to termination. Since a license does not confer property rights on the licensee, the license is terminated in the event of a sale of the property and cannot be imposed on the new owners of that property.

In addition, the death of the Licensee or Licensor terminates the Contract. An international licensing agreement allows foreign companies, exclusively or not exclusively, to manufacture an owner`s product for a specific period of time in a particular market. A licensor may grant permission to a licensee to carry out activities that would otherwise be in the patented product, to offer or import a patented product for sale, or to perform a patented process. [7] The term of a patent license can be a “fixed” term (i.e. . B fixed), i.B i.e. 5 years, or may apply to the term of the patent (i.e. until the expiry of the patent). A patent is inherently limited in its territorial scope; It applies only to activities within the borders of the country granting the patent. As a result, a patent license does not require any territorial regulation. Since this type of market launch strongly represents the transfer of knowledge between the parent company and the licensee, the decision to enter into an international licensing agreement depends on the respect that the host government has for intellectual property and the licensor`s ability to select the right partners and avoid competition in each other`s market.

Licensing is a relatively flexible work regime that can be tailored to the needs and interests of both the licensor and the licensee. Here are the main advantages and reasons for using international licenses for international expansion: The benefits of licenses can be considered from two angles: the licensor and the licensee. In the United Kingdom, prisoners serving a certain sentence (a fixed period in prison) are released “under licence” before serving their full sentence. [11] A permit is the inmate`s consent to comply with certain conditions, such as .B. report regularly to a probation officer and live only at an approved address in exchange for early release. If they violate the terms of the license, they can be “recalled” (sent back to prison). [12] [13] The applicability of end-user license agreements is sometimes questioned. Patent licenses have been studied in formal economic models in the field of industrial organization.

In particular, Katz and Shapiro (1986) investigated the optimal licensing strategy of a research lab that sells products to competing companies in the market. [15] It turns out that (compared to the welfare maximisation solution) the licensor`s incentives to develop innovations may be exaggerated, while the licensor`s incentives to disseminate the innovation are generally too weak. As a result, the revolutionary work of Katz and Shapiro (1986) was expanded in several directions. For example, Bhattacharya, Glazer and Sappington (1992) have taken into account that companies acquiring licences will have to make further investments to develop marketable products. [16] Schmitz (2002, 2007) demonstrated that information asymmetry due to adverse selection or moral hazard can cause the research laboratory to sell more licenses than it would with complete information. [17] [18] Antelo and Sampayo (2017) investigated the optimal number of licenses in a signaling model. [19] A licensor may grant a licensee permission to distribute products under a trademark. With such a license, the licensee may use the trademark without fear of a claim of trademark infringement by the licensor. Licensing often depends on certain contractual conditions.

The most common terms are that a license is only valid for a specific geographic region, only for a certain period of time, or only for a stage in the value chain. In addition, there are different types of fees within the brand and brand licenses. The first form requires a royalty independent of revenues and profits, the second type of royalty depends on the productivity of the licensee. A license is usually created by an explicit or implied agreement. Licensor must accept the license, which can be proven in writing, or the licensor`s consent to exercise it. In addition, unlike many other contractual agreements, a license does not require any consideration, a license can be created with or without it. In addition, whether an agreement is considered a “licence” rather than a lease depends on three essential characteristics of a licence: (1) a clause that allows the licensor to revoke “at will”; (2) the maintenance of absolute control over the premises by the licensor; and (3) the provision of all essential services necessary for Licensee`s authorized use of the Premises. [5] Under a typical End User License Agreement, User may install the Software on a limited number of computers. [Citation needed] Duration: Many licenses are valid for a certain period of time.


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