Types of licenses for intellectual property

Two of the most famous examples of trade secrets are the formulas for Coca-Cola and the recipe for KFC chicken. Trade secret licensing agreements often come with non-disclosure agreements or NDAs. NDAs state that the party receiving certain confidential information cannot share it with anyone.

Exclusive licenses are those that create a unique relationship between the licensor and the licensee. In these types of licensing agreements, the licensor agrees that the licensee is the only one who can make use of the IP.

These usually cost more for the licensee. In a non-exclusive license, the licensor may be licensing the IP out to more than one licensee. These types of license agreements usually cost less for the licensee. In a sole license, the licensor agrees to use just one licensee, but the licensor reserves the right to continue to use their IP, as well. A perpetual license is one where the licensee buys the right to use the IP just once and then can use it for a lifetime.

A term license is organized one of two ways: 1 the licensee can pay a one-time fee for a certain term or 2 the license can pay per use these are traditional royalties. Term licenses are much more common across all industries.

A lot depends on the property involved and the relationship of the parties. As you can see, there are many types of licensing. For an industrial design to be protected, visual appeal and originality are key. Industrial design is granted by the Patent Office to protect only the non-functional features of a product. The industrial design right is a reward for the creator for their work and investment in manufacturing a product. The typical period for enforceable protection is between 10 to 25 years, which is sectioned into terms.

If you wish to extend your term, you will have to renew your registration for these types of intellectual property. Introduced in , database rights were developed solely to protect databases. The investment includes financial, human and technical resources. The original owner of the database is the creator of the database and has the responsibility of obtaining, verifying and presenting the contents of a database.

The maker or creator also assumes the risk of investing in the same. The rights enable the owner to prevent others from extracting or reusing all or part of the contents of their database. The right is granted for 15 years from the date of creation. However, if the database is published within this time, the database rights are enforceable for 15 years from the date of publication.

Unfair competition is any fraudulent trade practice that is disallowed by statute, regulation or common law. It comprises related doctrines that provide for various causes of action such as infringement of trademarks or copyrights, wrongful appropriation of trade secrets and actions for publication of defamatory representations. The law protects the economic intellectual and innovative investments made by businesses to differentiate themselves and their products.

It also seeks to enhance competition by offering incentives to businesses to promote better goods and services than the competition. These types of intellectual property have a significant contribution to any national and state economy. Majority of industries depend on the adequate enforcement of their patents, trademarks and copyrights.

Consumer too use intellectual property to ensure they are buying safe and guaranteed products. This is Melissa. Common types of symbolic IP include brands, logos, and trade names. Company L is a management company that owns a number of semi-professional sports teams in small markets across the United States.

Company L routinely licenses its logos to local businesses to be used for creating and selling team merchandise. In this case, the license is for a symbolic IP.

Such activities include continuing to maintain a team, keeping the team in the Rochester area, etc. Therefore, the license provides a right to access IP and revenue is recognized over time. Therefore, we consider that the performance obligation is a promise to a right to access our intellectual property. As a consumer products company, our enterprise value is largely derived from our brand, trade logo, and trade names.

As the vendor in this arrangement, Starbucks has a license performance obligation that includes continuously providing access to the licenses within the contractual territories. On the other hand, revenue from licenses of IP deemed to provide a right to access IP will be recognized over the license period or its remaining economic life, if shorter.

This also applies to instances of license renewal and term extension. For example, when a customer renews a license, the entity may not recognize revenue from the renewal until the start date of the renewed license.

Commvault Systems, Inc. Commvault provides data protection and data management software. Commvault explained that it provides two things when transferring the software license to customers:. Commvault also determined that transfer of control occurs when the software key is delivered—even if the customer has not installed the software yet—based on the following facts:.

For subscription licenses, the Company does not recognize software license revenue before the beginning of the software license period even if it transfers the software code before the start of the license period or the customer has a copy of the software from a previous transaction. License contracts for IP often contain provisions that explicitly or implicitly define the attributes of a license ASC Provisions that define the attributes of a license are not considered in determining whether a license of IP provides a right to use or a right to access IP.

However, in some cases, explicit or implicit provisions may create promises to transfer additional licenses. In these cases, entities will need to evaluate each license separately to determine its nature. Company S is a global media company with a highly recognizable brand. The contract includes a provision granting Customer T the right to use the logo in both North America and Europe starting December 1, 20X1. In this case, the geographical provisions are merely attributes of the license that do not create additional licenses.

Therefore, this would be treated as one license in applying the licensing guidance. Assume the same facts as Example 4 except that the contract includes a provision granting Customer T the right to use the logo in North America starting December 1, 20X1 and in Europe starting in March 1, 20X2. In this case, the separate geographical and license start date provisions create additional licenses. This is because the rights to use the logo in North America have a discrete term from the rights to use the logo in Europe.

Therefore, these would be treated as two licenses in applying the licensing guidance. Concerning contract provisions that may create additional licenses, ASC A notes that guarantees validating patents or promising to defend patents from unauthorized use do not affect the nature of the license of IP.

Andrew has previously interned with KPMG, where he will begin full-time following graduation. Aside from accounting, Andrew enjoys playing the guitar and hiking with his wife and two children. Reach out to us with your questions or suggestions for future articles. Press enter to begin your search.

No Comments. Regulatory factors. There is strong interdependency between the license and the facilitation services because of the following factors: Collegium is contractually required to use the facilitation services to arrange for product supply.