Understanding what constitutes “intellectual property” (IP) and the importance of protecting it is important to any business owner. IP is anything that is created in an individual’s mind, including art, music, computer software, inventions, designs and trademarks. You can protect IP with a license, which is a type of contract that allows you to maintain control over your IP but transfers certain rights to a third party to use the IP.
The holder of the IP rights is called the “licensor.” The party that wishes to use the IP is called the “licensee.” By entering into a license agreement, the licensee pays money to the licensor for the right to use the invention or creative work. In many software license situations, the licensee is granted a non-exclusive right to use the IP. In other situations where the licensee has been involved in some development of the IP, the licensee may expect either ownership rights or exclusive rights to use the IP.
The primary way to protect your IP is to register for all rights that apply to your circumstance, such as:
- Patents – inventions
- Copyrights – original works of authorship
- Trademarks – symbols, words, names or other designations used to identify goods made or sold in order to distinguish them from other similar goods
Intellectual property law can be complex, so it is important to confer with a knowledgeable attorney on how to protect and manage your IP rights. Once you have secured your rights to the IP, you can create your licensing contract.
A license agreement does not have to be lengthy and complicated, but it must be uniquely tailored to meet your individual needs. You want to ensure the contract is clear and concise, but most importantly, enforceable. Federal law imposes strict civil and criminal penalties for unauthorized use of IP. Your license agreement should provide you with the ability to file a lawsuit to enforce your rights and recover certain remedies such as an injunction and monetary damages if the licensee misuses the IP. You may also be entitled to recover actual damages, which may include any money you lost as a result of the infringement. In certain cases, you may even be able to recover any profits wrongfully gained by the infringing party.
To learn more about license agreements or how we can assist you with other business-related matters, contact Leslie S. Marell today. For more information, please read our next blog titled “What to Include in a Licensing Agreement.”