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Licensing Intellectual Property in China

A well-written licensing agreement can make a big difference to a business. That's why we advise you to retain our China intellectual property lawyer to draft an IP licenesing agreement for you. There are various advantages to licensing a product, technology or a trademark. A business licensing a product can retain control over the product, including how and when the licensee uses the product. For example, the business licensing the product can specify how many parties can use the product and the payments that must be made for every use. Further, a license for a product typically has a set term wherein the product reverts back to the licensor when the term runs out. This is beneficial for many companies that desire to be dynamic and have the freedom to change vendors and business partners periodically. Likewise, a business licensing a trademark can retain control over the quality of the products sold under the trademark.

I have vast experience in drafting and negotiating well-written licensing agreements that protect the intellectual property being licensed and allows for greater revenue. I am adept at working with my clients to develop strategies for exploiting their technologies and for navigating the myriad legal and technological issues that arise in drafting and negotiating licensing agreements involving technology transfer.

As a Board Certified Specialist in the area of Intellectual Property Law, I can assist you with your intellectual property licensing needs.

Licensing your intellectual property:  You can license other businesses to use your intellectual property (IP). You might do this because you do not have sufficient resources to exploit your IP yourself.

If you license another business to use your IP, that business is allowed to sell products and services based on it. In return, they pay royalties to you based on the income that your IP generates for them. There are a number of different types of licence that you can grant:

Non-exclusive licences can be granted to as many people and businesses as you like. However, this means lower royalties, and a large number of non-exclusive licence holders can be difficult to manage.

An exclusive licence gives the licensee the exclusive right to exploit your IP - royalties are higher.

A sole licence is similar to an exclusive licence, but you retain the right to use your intellectual property yourself. Sole licences can be safer than exclusive licences as you are not completely reliant on a licensee. However, royalties are often lower.

Whichever licence you grant, you need to make sure that you appoint licensees that will maximise the potential of your IP. This means appointing people who have the skills and resources to manufacture the products and the distribution network to get those goods to the market. You should also make sure that your licensees have a good reputation so that your brand will not be damaged.

Your licensing agreement should cover:

 

  • how the fees and royalties are calculated and when they are paid
  • what the licensee is allowed to do (eg manufacturing, distribution) and whether any sub-contracting is allowed
  • the territories the agreement covers
  • how long the licence agreement lasts, who can terminate the agreement and what the grounds for termination are
  • what indemnities each party is required to provide and what insurance each party to the agreement is required to carry

 

 
  • Goal

  • Fees

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I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

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China Lawyer BLog AuthorPeter Zhu, an experienced China attorney licensed to practice law for more than ten years, the author of this China Lawyer blog, welcomes any enquiry or consultation related to Chinese law.