Licensing allows the owner of intellectual property to authorize another party to use their creation, typically in exchange for money or royalties. In most cases, licensing agreements are mutually beneficial as both the licensor and licensee derive value from their relationship. However, there are cases in which the parties disagree with or violate the terms of the agreement. Situations like these call for the experience and dedication of a knowledgeable intellectual property litigation attorney.
Whether you are the licensor or the licensee, The Keleher Appellate Law Group can help. We can represent you at all stages of litigation and explore ways to resolve the dispute without the need for a trial.
What to Do When a Licensing Agreement is Breached
When a licensing agreement is breached, swift action is essential. Both licensors and licensees in Chicago should carefully review the agreement to identify which terms may have been violated and collect evidence such as communications, payment records, or proof of unauthorized use. It’s also critical to avoid taking retaliatory action that could violate the agreement or harm your legal position.
Common Licensing Disputes
Although having an intellectual property licensing agreement is indispensable and minimizes the risk of disagreement, it does not guarantee that the parties will always agree with each other. These are a few common intellectual property licensing agreement disputes:
- Scope of the license: Attorneys go to great lengths to carefully define the scope of intellectual property licensing agreements. However, disagreements are possible over matters such as the duration of the license, the territory covered, and others.
- Breach of contract: A party may fail to uphold their end of the bargain in various ways, such as not adhering to the exclusivity clauses that are foundational to the agreement.
- Breach of confidentiality: The information obtained about the intellectual property in question is subject to strict confidentiality. Being granted a license imposes upon the licensee an obligation to hold in confidence anything material that is learned about the intellectual asset.
- Royalty disputes: Royalties are usually calculated as a percentage of gross or net revenue that is earned by the licensee’s use of the intellectual property. The parties may disagree on the amount of revenue generated, which then leads to disputes over the correct royalty payments.
- Disagreements over rights: The licensor grants certain limited rights to the licensee, and the agreement must be carefully drafted to avoid granting more rights than are intended. However, the licensee may claim the authority to exercise broader rights that might undermine those of the licensor.
- Failure to prevent unauthorized use: The licensing agreement should set strict parameters for the types of uses that are authorized, but due to carelessness or even intentional conduct, the licensee may fail to prevent unauthorized use.
- Assignment and sub-licensing: The agreement may or may not permit the licensee to assign or sub-license the intellectual asset. Even if these are allowed, they will be limited in scope, and issues may arise over whether either party’s actions breached the agreement.
- Quality issues: The licensee may complain that the licensed product lacks quality. Licensors make certain representations about the product that is being licensed, so when those statements turn out to be inaccurate, a dispute can easily arise.
- Termination and renewal: Disputes are common when one party attempts to terminate or renew the licensing agreement. Alleged breaches and failure to perform may hinder renewal, while one party or the other may contest whether there were proper grounds to end the agreement.
- Dispute resolution: Licensing agreements usually include alternative dispute resolution methods such as mediation or arbitration. However, even these can lead to disagreements.
Resolving Licensing Disputes
The key to resolving licensing disputes is to act proactively and strategically. In Chicago’s competitive intellectual property market, early legal intervention can help contain the dispute and minimize disruption. Whether you are seeking to enforce your rights or defend against allegations, we provide tailored counsel to protect your interests.
The Role of Mediation & Arbitration in Licensing Disputes
Mediation and arbitration are often preferred methods for resolving licensing disputes, particularly when the goal is to preserve a business relationship or avoid the costs and delays associated with courtroom litigation. Many licensing agreements include clauses that require these forms of alternative dispute resolution (ADR). Mediation enables parties to negotiate a mutually acceptable resolution with the assistance of a neutral third party. Arbitration, while more formal, offers a binding resolution without going to court.
The Role of Litigation in Resolving Licensing Disputes
When negotiation, mediation, or arbitration fails, litigation may be necessary to protect your rights or enforce the terms of a licensing agreement. Litigation can involve complex legal arguments and evidentiary issues, especially when it comes to intangible assets like intellectual property. We are well-versed in state and federal procedures, as well as appellate strategies, which are crucial in high-stakes licensing cases.
How Our Law Firm Can Help
When licensing disputes arise, the business relationship among the parties, the protections and profits for the licensor, and the beneficial uses enjoyed by the licensee are all threatened. The Keleher Appellate Law Group takes the following comprehensive legal approach to both preventing and resolving the above issues:
- Licensing agreement drafting and modification: If you have not yet entered into an agreement or it has not been reduced to a written contract, we can draft this for you. On the other hand, if your existing agreement has ceased to serve your interests, we may be able to help you modify it.
- Applying our knowledge of intellectual property law: Clients hire intellectual property litigation firms because of their legal knowledge. With every intellectual property client we retain, our firm leverages its extensive experience in addressing a wide range of legal issues that arise in licensing disputes.
- Negotiating and resolving the matter out of court: Not all licensing agreement disputes have to end up in front of a judge. Even when a lawsuit is filed, the parties can still negotiate a settlement privately through mediation, arbitration, or other means. Where possible, we work to save our clients time and money by negotiating mutually agreeable resolutions.
- Taking the matter to trial: If a licensing agreement dispute cannot be settled outside the courtroom, then a trial will be necessary. We are seasoned litigators who understand the substantive laws, procedural rules, evidence rules, and how to make a compelling argument in your favor.
Contact Our Chicago Licensing Disputes Attorney
No matter which side of a licensing dispute you find yourself on, you do have options for properly addressing it. Start by contacting The Keleher Appellate Law Group today. We can explore different alternatives for handling the dispute and then work toward resolving it positively.