Licensing of IP…. a smart way to boost your resources.
Significance of IP as a use by third party is gaining more prominence in the era of internet, innovations and digital mediums. With intense competition spearheaded to maintain quality trademark licensing is gaining reputation. In trademark licensing, a trademark owner (licensor), grants permission to another (licensee) to use that trademark on mutually agreed terms and conditions.
There are different ways to license a trademark. This includes, franchising, merchandising, brand extension, and co-branding. The benefits that one accrues out of the license agreement include additional revenue stream, territorial expansion, and manufacturing, distributing and marketing benefits. The agreement is governed by certain terms and conditions conducive to both the parties.
Among the recent developments includes, HCL’s unpredictable move to spend billions to acquire a pool of intellectual properties from the industry heavyweights. Unpredictable in the sense that it’s acquisition of products are those that are either losing their significance or have almost outdated from the market. This includes Lotus Notes and others. The company is licensing with other giants to acquire such products and then building their own products for clients. The company aims to develop new technological solutions or customize the core intellectual property technology, and then jointly sell alongwith the IP-owners of the technology the new solutions. The move is also seen as a part of intense competition and many giant IT companies are unable to charge higher prices due to such competitions. The move of HCL is taking into consideration innovative IP partnerships through strategic relationships. In such a way they tend to create markets for products and platforms. However, it should be noted that such innovative IP licensing tendencies using sunset technologies will yield results only when HCL is able to build a new ecosystem by introducing new technologies and thereby compete the currently available cheaper apps.
Another area where IP licensing is gaining momentum is Copyright industry whereby Indian Performing Rights Society wants royalties for music used by telcos. A group comprising of composers, lyricists, and music publishers have initiated the process of seeking royalties from Indian telecom companies for use of their works including songs and music made available for streaming and downloads. The royalties accruing through literally material and sound recording varies anywhere between 8% to 12% on a yearly basis.
We, at Makhija and associates, focus upon core areas of license agreement or registered user agreement such as the terms and conditions, it’s implications and dynamics in long term, the priorities of clauses and it’s meaning with the changing outlook. It is fundamentally aimed towards a watertight agreement centered towards a win-win situation for both the parties involved.
Shri. Rajiv Agarwal of Asiatic Marketing Pvt. Ltd. is exploring his brand potentials by licensing it to his company. It gives them more conducive environment for upscale and facing competition. The brand assortments not only gives them ample of scope, it also improves their brand value.
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