A license allows an intellectual property rights holder (i.e., the licensor) to make money from an invention or creative work by charging a user (i.e., the licensee) for product use. Licenses protect proprietary rights in things such as software programs, literary works, inventions, audiovisual work, etc. One can use a license to give another person or entity permission to do a certain activity or to use one’s intellectual property.
A license or licensing agreement could be used to grant rights of usage or exploitation to an end-user in connection with the following intellectual property forms:
- Copyrights – original works of authorship fixed in any tangible expression form
- Patents – inventions
- Trademarks – words, names or symbols identifying goods made or sold, distinguishing them from others
Each of these types of intellectual property grants an owner certain specific rights to exclusive usage and exploitation of the property at issue. It is imperative that one understands well his or her rights before granting a license to a third-party user. Because the license (or licensing agreement) will grant a third-party user powerful rights vis-à-vis the intellectual property at issue, it is imperative that the licensing agreement be drafted by a competent lawyer who understands well the underlying intellectual property rights, and the overall goal of the transaction.