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IP licensing strategies can help avoid litigation

On Behalf of | Jan 17, 2023 | Intellectual Property Disputes

As intellectual property licensing becomes more and more popular with San Francisco, California, businesses and social media influencers, the litigation that can occur as a result of bad IP licensing agreements is also increasing. However, with the appropriate IP licensing strategies, you can, hopefully, avoid business litigation.

Why is it becoming more-and-more popular?

For all types of businesses, IP licensing can help expand your brand, expand your products or services into new markets (even internationally) and monetize aspects of your business that are not currently monetized. For social media influencers, IP licensing can expand your income streams outside of your social media posts and product placements. Your brand can be used on products themselves or even to create entirely new businesses with your brand.

Don’t just jump in

While IP licensing can be lucrative, it can also be costly, if not done correctly. Take, for example, the common practice of hotel chains licensing their brands to private hotels. Since that private hotel is now branded with the national chain’s name, anything that the private owner does will not be imputed onto that national chain. Over time, given enough bad act and bad actors, this can greatly harm that national hotel chain’s brand.

So too can any bad IP licensing agreement. This is why it is so important to not only build in safeguards in your IP licensing agreements but also to ensure that the license itself is in line with your goals. Think about what you want to accomplish with the license, even if it truly is profit maximization.

IP licensing agreement basics

First, make sure the IP licensing agreement is not just a handshake agreement. Every term should be negotiated, in writing; looked at by your attorney and signed by both parties. This will ensure that the agreement is enforceable.

IP licensing agreement terms

Second, as to the terms themselves, many items should be included. This includes the payments (royalties, lump sums, recurring fees, etc.), when the license will expire and if it will renew and the geographic area in which the license is valid (regional, national, country-specific, international, etc.). You will also need to figure out whether you will have one license (exclusive) or multiple (non-exclusive), and each license will need to include all of the rights granted by the license, as well as any ability to assign (sell) those rights.


Finally, include terms on how the agreement will be enforced, should a term be violated, including which state’s laws govern and how disputes will be handled (arbitration, etc.). And, do not forget to include indemnification against third-party claims.