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.
Common Licensing Disputes
Although having an intellectual property licensing agreement is indispensable and minimizes the risk of a disagreement, it is no 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 such matters as the duration of the license, the territory covered, and more.
- Breach of contract: A licensing agreement is a contract that binds the licensor and licensor and obligates both parties to perform certain duties. There are many ways that a party may fail to uphold their end of the bargain, such as not following 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. Failure to maintain this confidence could open the door to legal action.
- 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 as to the amount of revenue generated, which then translates to disputes over the correct amount of royalty payments.
- Renegotiation of royalties: When an intellectual property owner (e.g. software company) releases a new product, either the licensee or licensor may wish to renegotiate royalties. If those negotiations do not go well, the parties may dispute the original royalty schedule.
- 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. This can cause serious financial loss to the licensor and trigger a lawsuit.
- 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 product being licensed 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. The parties may not see eye to eye about the choice of law provisions, jurisdiction, arbitration clauses, or the correct procedures for resolving disputes.
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 brings to bear our extensive experience with a wide array 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 by way of mediation, arbitration, and 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 giving The Keleher Appellate Law Group a call. We can explore different alternatives for handling the dispute and then work towards resolving it positively.
The Keleher Appellate Group, LLC, serves clients in Chicago, Denver, St. Louis, and the surrounding areas in Illinois, Indianapolis, Indiana, Missouri, Wisconsin, and Colorado. We also provide our services nationwide and internationally.