Licensing is increasing as manufacturers and retailers work to expand their core business and change their strategies to include more licenses. For example, Merck and Upjohn have authorized organizations in other parts of the world to manufacture and sell their pharmaceuticals. Other companies using licensing agreements in this way are McDonald`s, Nestlé, Anheuser-Busch and KFC. As this simplification suggests, licensing is a symbiotic relationship between companies that, in a sense, do not correspond to intellectual property. Companies with intellectual assets that are more valuable than their current marketing structure can support the search for external partners to maximize returns on their assets. For example, a licensee of a known brand must not have the ability to manufacture and distribute all products that could be marketed under the brand name. In addition, it is not in the strategic interest of the company to participate in different types of production when these activities are not within its jurisdiction. In the meantime, other companies may be technically qualified in the manufacture of these products, but name recognition and access to distribution channels, which have a large brand name, may be lacking. A licensing agreement allows everyone to exploit their strengths.
A licensing agreement is a written contract that gives you permission to use the property of another party under certain conditions. The two parties to the agreement are the licensee (who issues the authorization) and a licensee (who receives the authorization). Licensing has certain risks and disadvantages. The company may lose control of the production and marketing of its products in other countries. As a means of entering the international market, licensing may also be less cost-effective than other decisions, since returns must be distributed between two parties. There is even a risk that the foreign licensee may sell a competing product similar to the expiry of the license agreement. Other risks and problems are the choice of a partner and all general uncertainties in the business with an international partner, including language, culture, political risk and currency fluctuations. Alternatives to licensing are exporting, acquisitions, the creation of a 100% international subsidiary, franchising and the formation of strategic alliances.
Both licensees and licensees want to be deepened in their agreements to ensure that nothing is overlooked. Both parties need to know what their rights are with respect to this relationship. Licensing agreements cover many factors, including: Christian, Glynna K. „Joint Ventures: Understanding licensing issues.“ The licensing newspaper. October 2005. Given that brand licensing is based on an already strong brand identity, licensing can, as soon as obvious precautions are taken against abuse, be one of the most risky forms of licensing for both licensees and licensees. Of course, it is important to ensure that licensed uses of the brand do not tarnish the image on which they are based. However, in many cases, the primary use and conceded use of the mark can be mutually beneficial, since one is indirect advertising for the other. According to Robert C. Megantz in How to License Technology, other licensing strategies include creating a joint venture, acquiring a company with the necessary know-how, developing internal capabilities for all licensed functions, and allowing another company to purchase and fully manage intellectual property rights.
Each of these methods carries different risks and potential returns for the company. A licensing agreement is a written contract between two parties, in which one landowner allows another party to use that property under a number of parameters. A licensing agreement or licensing agreement usually involves a licensee and a licensee. Licensing on the