Licensed to Protect

Do you have a software business and are looking to get busy licensing your products to others? Perhaps you need to formalise your existing licence 'handshakes' into a clear written statement?

There are some important things you need to get in place now to protect and commercialise the benefits of your hard work and the time to do it is now! Mdp McDonald Partners Lawyers and Commercial Advisors have vast experience drafting, negotiating and reviewing Australian and international licence agreements, as well as resolving licence disputes. We can help you to capture and document your licensing arrangements, and will work with you to maximise the value of the licensing relationship for you.

Almost any type of intellectual property (IP) can be subject to a licence: copyright (including software), brands (including trade marks), and technology (including patented technology and trade secrets).

Under a licence, the owner of the IP (the "licensor") retains ownership but grants the right to use the IP to another party (the "licensee"). Licensing can generate a valuable source of income for the licensor. We are frequently contacted by companies and individuals who have been burnt by licence arrangements gone awry.

Here are our top tips to ensure that licences work for you:

1. Clarify the scope. Does the licensee have an unrestricted right to use the IP? Or is the right to use confined to a particular area or market sector?

2. Clarify the term. Is the right to use indefinite, or for a fixed term? Is there is a right to renew? Be cautious of indefinite (perpetual) licences, because circumstances can change over time.

3. Clarify the subject matter. What IP rights are subject to the agreement? Does it include future improvements? For example, subsequent versions of licensed software?

4. Clarify the conditions. Does the licensee have to meet any particular requirements to retain the licence rights? For example, meet minimum sales targets or satisfy key performance indicators (KPIs)?

5. Record the details of the licence in writing. Informal or unwritten licences can often lead to confusion down the track, therefore licence terms should be recorded in writing.

6. Seek professional advice. Licence agreements may have unintended legal, accounting or tax implications, so it is important to get professional advice before the terms of a licence are finalised. Licensing arrangements are best reviewed by a lawyer and can ultimately work for you and avoid costly licence disputes.

For more information on technology licences or to arrange an appointment contact the team at www.mdplaw.com.au.

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