Meeting License and Licensure Requirements with an Attorney
Whether it be using someone else’s property or carrying out an event or activity in another’s backyard, it is always a must to either have a right to engage in such activity or otherwise, seek the appropriate permission to do so. Similarly, it is always important to license your ventures to show that you have the authority and the right to a vested interest. Otherwise, your venture might face legal interruptions, leaving you in a disadvantageous position or worse yet, have to shut down your operations and pay hefty penalties.
Licensing becomes all the more important when considering those required for carrying out a business in a particular jurisdiction. In such cases, there are possibilities that your business might be forcefully removed from operating and you also risk incurring fines. Hence it is always a must for business to gain a license which approves of them meeting necessary requirements and grants them permission to carry out their activities. These types of licensing usually come in the form of City or County occupational licenses. Additionally, certain types of businesses require additional licensing such as tobacco-related fields, firearms, or alcohol licensures.
Licensing a product to others
When a company develops a product it can license it to other companies or individuals. This license may be to use the product’s brand or to even engage in buying and selling of the product. The licensed company or individual is given the right to use the particular product for their gain or benefit. A good example of licensing to another organization is when you see action figures of popular movies or serials or other such kids toys being sold with a favorite kid meal. The owner of the movie may not be into making those figures but has licensed it to the fast food company.
The fast-food restaurant gains the license of making toys based on the characters in exchange for a small amount called royalty fees. These royalty fees are paid in order to gain the license to use a particular product or organization’s brand for endorsement or any other such enterprise, such the usage of the Facebook logo on certain websites & cellular models.
Important: Written Contract Needed
One rule of thumb to always follow when entering into licensing contracts is to make sure that the licensing agreement is clearly manifested in a written instrument or written contract. You may have full faith in whom you are dealing with but you never know when circumstance might become unfavorable and besides the faintest ink is better than the best memory. Therefore always make sure you have that written contract duly signed, checked, revised and iterated to the last detail.
Some of the important terms which a license defines are
• The rights of use of the trademark, sign-mark or product which is being exchanged (licensed) for some form of consideration.
• Terms and conditions which define the usage of the product
• Any situation where the license may be terminated are reasons upon which the license may be terminated, canceled or discontinued.
• Rights of operation within a particular jurisdiction or geographical region.
• Identities of the Licensor and the Licensee
Licensing is a really important process and should be done with proper consulting and expert advice. It is always important to have a written contract of the license and also good to trademark or sign mark the license. With a license in your hands, you can take your enterprise further without having to worry about infringing on someone else rights.
From helping a business acquire the proper licensure as well as drafting and enforcing licensure agreements, our dedicated attorneys at Arcadier, Biggie and Wood are here to help.