An international licensing agreement
allows foreign firms, either exclusively or non-exclusively, to manufacture a proprietor’s product for a fixed term in a specific market
.
What is the meaning of licensing agreement?
A licensing agreement
allows one party (the licensee) to use and/or earn revenue from the property of the owner (the licensor)
. Licensing agreements generate revenues, called royalties, earned by a company for allowing its copyrighted or patented material to be used by another company.
What is importance of licensing in international business?
Licensing is
another way to enter a foreign market with a limited degree of risk
. Under international Licensing, a firm in one country permits a firm in another country to use its intellectual property( Patents, trade marks etc).
What are some examples of licensing?
Examples of licenses include
a company using the design of a popular character
, e.g. Mickey Mouse, on their products. Another example would be a clothing manufacturer like Life is Good licensing its designs and brand in a certain country to a local company.
What are the 3 P’s of licensing?
The 3 P’s of collegiate licensing are
protection, promotion, and profit
.
What is a good licensing deal?
Royalty rates vary per industry, but a good rule of thumb is between 2-3% on the low end, and
7-10% on the high end
. I have licensed consumer products for as low as 3% and as high as 7%, with 5% being the most common and a generally fair number.
What are the challenges of international licensing?
Particularly, international licensing is itself open to various problems, such as ‘
payment risk’
(which arises from under-reporting of earnings and currency differences) and ‘valuation risk’ (the uncertainties in valuing the licensed trademark) (Mottner and Johnson, 2000) .
What are advantages of licensing?
- It creates an opportunity for passive income. …
- It creates new business opportunities. …
- It reduces risks for both parties. …
- It creates an easier entry into foreign markets. …
- It creates self-employment opportunities. …
- It offers the freedom to develop a unique marketing approach.
What are the types of international business?
- Exporting: …
- Licensing: …
- Franchising: …
- Foreign Direct Investment (FDI):
How can licensing be defined?
Licensing can be defined as
the process of leasing a trademark
, a piece of intellectual property, a copyrighted entity usually named as a property that is used usually in conjunction with Products, Services or even Promotions.
What companies use licensing?
- The Walt Disney Company – $54B.
- Meredith Corporation – $30.1B.
- Authentic Brands Group – $13.8B.
- WarnerMedia – $11.B.
- Hasbro – $7.8B.
- NBCUniversal/Universal Brand Development – $7.5B.
- ViacomCBS – $5.8B.
- The Pokémon Company International – $5.1B.
Which is better franchising or licensing?
Franchises
typically work best for service-based businesses, while licenses are more conducive to product-based businesses. … A licensee has more control over how they run their business compared to a franchisee, whose business will be dictated by the franchise owner (franchisor).
How do you negotiate a licensing agreement?
- Do your homework. …
- Start with a term sheet. …
- Manage your expectations. …
- Be patient. …
- Have a win-win attitude. …
- Don’t lose your sense of humor. …
- Remember to hold something back. …
- Put yourself in their shoes.
How do licensors get paid?
The Licensor receives a
perpetual/time bound payment as a percentage of sales in regards for using the intellectual property
. You can take for example – an earning from copyright, patent on new products, and consumer product licensing more. Royalties and license are members of same royal family.
What are the three P’s of licensing programs and what do they mean?
manufacturer of licensed products. What are the Three P’s.
Protect, Promote, Profit
. The Three P’s: Protect. – style guide.
How much does a licensing agreement cost?
If you want a licensing agreement tailored to your specific situation, most attorneys charge
$100-$300 or more an hour
. A simple contract typically takes about 3-4 hours, or $300-$1,200 or more — which includes an initial draft plus revisions.
