Forums: Discussions for entrepreneurs and small business.

I have a Utility patented & TM product & a established company in the industry that is seriously interested in licensing it from me.  They are now awaiting me to send a licensing agreement to them.  I would like to keep it simple, but cover all pertinent points.  We have agreed on a generous royalty, and they have expressed their interest in creating a significant market.  They distribute to 75 countries. 

I need a template with which to create a Licensing Agreement.  I have started and successfully sold 6 previous small businesses; am a journalist; was a legal secretary and would like to keep attorney`s expenses to a minimum, thus would like to structure the Agreement myself - as much as possible, before the attorney`s clock starts ticking on it. 

If anyone can help, I sure would appreciate it.

asap is very important.

Bevjoy,

You are a competent successful person. You already have a good idea of how the terms are panning out. You need only to have it put on paper. Believe me, you can do this. Do keep it simple but do have it then reviewed by your attorney for strength.

With our product we wanted obviously to establish the basics:  

• Who is the licensor?
• Who is the licensee?
• How much per unit?
• When the agreement expires
• The option for the manufacturer to have first opportunity to make an offer in advance of expiration
• What are the payment terms?
• Your role as licensor -- things you expect to maintain some level of control over or at least be kept in the loop for such as
•  marketing efforts
• product image
• sales training
• customer service
• Their role as licensee (things you expect them to maintain and advance such as an annual marketing plan, steadily increasing sales, monthly sales reports delivered with royalty)
• Escape clause if they fail to perform their role
• Retention clause that allows the manufacturer ample time to correct problems that keep them from maintaining the agreement.

We made an attempt to get them to commit to growing sales numbers and minimum royalties that increased annually. They balked at this but then as we went back and forth, we eventually ended up with something that worked well on both sides.

I think keeping it simple leaves little room for misinterpretation and that`s important. Our licensing agreement was 3 or 4 pages total with a signature page.

You can expect them to make some changes and reword things a little. It shouldn`t cost much to have your attorney look over the agreement each time. Just remember that you don`t have to do everything that your attorney tells you to do. That sounds ridiculous but you know more than he/she does what will make or break the agreement.  Your attorney just needs to make sure that you don`t put yourself in a vulnerable position that you can`t wiggle out of if necessary.

~Eric

Hello Bevjoy,

First step - You should outline the proposed content of the license agreement. Here is a basic list of issues and interpretations of terms you should consider to cover ....

Agreement Purpose

Licensed Material: Content of the knowledge to be transferred:

Delivery: Format of the Licensed Material, means to deliver, Time to deliver   

GRANT OF LICENSE to Licensee

Royalties and other payments

Support and maintenance

Indemnification, Limitation of Liability

Term: Start date and end date

Termination: How can the agreement be terminated before the end of the term?

There are alot of books available to you - one in particular is called the "Inventor`s Bible" by Ronald Louis Docie, Sr.  The template for a licensing agreement can be found in there.  But a word of caution:  "make sure your attorney reviews it before you submit it to any licensing companies for signature".  Good Luck.