Compensation Under A Licensing Agreement

Subsidiary license. The licensee may be granted the right to authorize another person to manufacture or sell his products. This depends on the specific terms of the license agreement. Sub-arrangements. As part of the license agreement, there may be sub-agreements, as with other types of contracts. For example, the licensor may require a confidentiality agreement to prevent the licensee from passing on proprietary product features or processes to others. The licensee may require the licensor to sign a non-compete clause in order to prevent the licensor from breaking the agreement by allowing someone else to sell the product in the licensee`s exclusive territory. Sample licenses are available in many different industries. An example of a license agreement is an agreement between software copyright holders and a company that allows them to use the computer software for their day-to-day activities. A license agreement is a written agreement between two parties in which one property owner allows another party to use that property under certain parameters. A license agreement or license agreement typically includes a licensor and a licensee. One of the most important elements of a licensing agreement is the financial agreement.

Payments made by the licensee to the licensor are generally made in the form of guaranteed minimum payments and royalties on sales. Royalties are typically between 6 and 10 percent, depending on the licensee`s property, experience, and sophistication.

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