Founder
Licensing agreements can be powerful tools for businesses, creators, and technology holders. They allow you to expand your reach, generate revenue, and maintain control over intellectual property. But when the terms of a licensing agreement are breached—or when the interpretation of those terms becomes contested—disputes can arise that are difficult to resolve through negotiation alone.
When should you consider taking legal action? Here’s what to keep in mind before litigating a licensing dispute.
The Nature of the Dispute
Not all licensing disputes rise to the level of litigation. Many are the result of misunderstandings, unclear contract language, or shifting business goals. Before heading to court, it’s essential to understand the root cause of the issue:
- Is there a clear breach of contract?
- Is the licensee using the property outside the agreed-upon terms?
- Are royalties or other payments being withheld?
- Is the licensor trying to terminate the agreement unfairly?
Sometimes, a letter from counsel or a mediation session can bring both parties back into alignment. But in cases where the dispute threatens your business or intellectual property rights, litigation may become necessary.
Common Scenarios
Here are some of the more serious situations where pursuing legal action might be the right next step:
1. Clear Breach of Contract Terms
If either party breaches the contract in a material way for which there is no other remedy.
2. Unauthorized Use of Licensed Property
When a licensee continues to use your intellectual property after the license has expired or been terminated, that’s not just a breach—it may be infringement. This type of unauthorized use can damage your brand, reduce the value of your IP, and lead to lost revenue.
3. Disputes Over Royalties or Accounting
Many licensing agreements rely on accurate reporting of sales or usage in order to determine royalties. If the licensee fails to report, underreports, or withholds payment, you may need to take legal steps to enforce transparency and secure what you’re owed.
4. Interference With Third-Party Rights
If your licensee is sublicensing or transferring rights without your consent—or is acting in ways that affect your relationship with other licensors or partners—litigation may be necessary to preserve your reputation and contractual obligations.
Weighing the Risks and Benefits
Litigation can be expensive and time-consuming, and it’s not always the most efficient way to resolve a dispute. Before deciding to sue, it’s worth evaluating a few key factors:
- Do you have clear evidence of breach or wrongdoing?
- Are the damages significant enough to justify legal costs?
- Is this a partnership you need to continue working with, or is it beyond repair?
- Could arbitration or mediation resolve the issue faster or more cost-effectively?
If your rights are being violated and informal solutions have failed, litigation can be the most effective way to enforce the terms of your agreement and protect your business.
How Legal Counsel Can Help
Licensing agreements often involve complex legal and technical terms, particularly in industries such as technology, media, and life sciences. Working with attorneys who understand licensing law can help you:
- Review and interpret complex agreement language
- Identify breach points and supporting evidence
- Evaluate whether litigation is in your best interest
- File claims or defend against them in court
- Explore settlement options that preserve long-term value
At The Keleher Appellate Law Group, we assist clients in enforcing and defending licensing rights through thoughtful litigation strategy. When disputes cannot be resolved through conversation, we help you prepare to take the next legal step.
Facing a Licensing Dispute? We Can Help
No one wants to end up in court. But when licensing disputes affect your revenue, brand, or intellectual property, standing still isn’t an option. Whether you’re a licensor protecting your IP or a licensee defending your rights under contract, litigation may be the most straightforward path to resolution.
If you’re facing a serious licensing conflict, turn to Keleher Appellate Law Group. We will help you evaluate your legal options and determine whether litigation is the best course of action. Connect with us today.