International Licensing Agreement Advantages And Disadvantages

If you own intellectual property, licensing is an opportunity to create a continuous stream of passive income. They also have nothing to do to generate this income. Just sell licenses after developing the IP and you can get started. As long as the licensees make money, you will also earn money and you will not risk losing your property rights. These payments could last several years without interruption. However, if you will market your idea to an already well-established and well-known company, already present in your target market, it is likely that you will achieve much better results in the long term and that you will avoid the risk and responsibility of starting your own business (“Getting Started as an Entrepreneur”, 2019). If your product is well supported, licensing can bring in a lot of revenue with little or no effort on your part. And the company benefits too – it also makes a huge profit with a new line of products that companies need to continue to compete in the market. When a licence agreement is signed, the licensee assumes the entire risk in the agreement.

They depend on the quality of the intellectual property used to make their own profits. If they do a good job and make a lot of money, the licensor can apply for an extension that costs more than the original license. There is also no guarantee of exclusivity with many licenses, which means that multiple companies could compete in the same market and use the same tools and products to generate revenue. (iv) The licensee should evaluate the license agreement if the mark is not the subject of the license agreement. [9] If new services are being considered, it is a little different from the process of obtaining a license agreement for a product or idea. Unlike a license agreement, a franchise refers to the granting of rights of use for service companies or business models and not for products. Although they are similar in idea, they are not quite the same. The benefits of licensing can be viewed from two angles: licensors and licensees.

An international licensing agreement allows foreign companies to manufacture, either exclusively or not exclusively, the product of an incumbent in a given market for a certain period of time. Learn how to get a patent license and read how to buy and get other people`s patents. This is very attractive for companies that are new to international business. On the other hand, international licensing is a mode of entry abroad that has certain disadvantages and reasons why companies should not use it, since it exists: (ii) If the licensor is not aware of the new market or if entering new markets involves certain risks, the licensing agreement could overcome these difficulties. ==Individual credentials== In the simplest sense of the word, you authorize an entity to use your intellectual property – your idea or invention – that you have protected with a patent. You essentially authorize to reproduce what you have created, whether it is a material product or an immaterial design or idea. For more information on license agreements, please email me or call 020 7099 2621. My next contribution will deal with export in its various forms. Often, licensing is a more lucrative choice for certain products and industries, especially when you consider the cost of starting a new business (time and money) and because licensing brings your product or service in front of an already established customer base and a much wider audience (Abedi, 2018). There is no guarantee that a license agreement will generate cash. You might agree with a licensee on a certain royalty and never see anything, as the licensee cannot generate sales..

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