If someone has a franchise, there may be a licensing agreement, and there may be several types of licenses within the franchise. For example, a McDonald`s franchise could include licenses for the use of the McDonald`s logo on products and packaging and another license for the manufacture of its patented processes or ingredients. In addition to the criminal consequences, a breach of a licence agreement can often expose the accused to civil liability. Many treaty violations represent heavy financial losses for the non-injurious party. Therefore, a breach of a licence agreement may result in an action for damages for the non-harming party. However, unlike other areas of contract law, licensing law is a legal area that is heavily regulated by both federal and national law. For example, copyright violations and other unauthorized use or appropriate protected material can have serious criminal consequences for the defendant. This can result in fines and/or prison sentences. There are many uses for licensing agreements. A common practice is for marketing technologies, for example, when your small business wanted to use software in your business.
The software company may ask you to sign a licensing agreement in order to use its software. Another example is that franchised companies have licensing agreements with the headquarters of a restaurant. Licensing allows the franchisee to use the company`s branded and marketing materials. Another common element of licensing agreements is the party that retains control over copyrights, patents or trademarks. Many contracts also contain a provision on territorial rights or distribution in different parts of the country or the world. In addition to the various clauses included in the licensee protection agreements, some licensees may add their own requirements. They may insist on the guarantee that the licensee owns, for example, the property`s property rights, or they may insert a clause prohibiting the licensee from directly competing with the property granted in certain markets. The bargaining power of both parties to a licensing agreement often depends on the nature of the product. For example, a film studio that would grant the image of a popular superhero to an action figure maker could have considerable bargaining power in this negotiation, as the manufacturer will likely benefit from such an agreement.