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Negotiate Licensing Agreements Like a Pro with these Tips

Not all licensing agreements, however, are so one-sided. Where the parties have relatively similar bargaining positions and can negotiate the terms of the licensing agreement, here are the terms that must absolutely be included

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Licensing is an important part of many business relationships and is often a great way for toe-dipping in an area without full commitment. Franchise agreements are a classic example of licensing agreements because one party is allowing another party to use their property, but not have ownership or control over that property. When someone purchases a franchise of his or her favorite fast food venue, he or she are not sold the trademarks or rights to use those marks outright. They are given a license to use those assets to help to further their business, but they cannot claim any ownership.

Like all agreements involving the exchange of rights or services for money, it is very important to understand how these licensing agreements work as they have some particular quirks that are not featured in your garden variety agreement. The best way to understand is to have an attorney who understands licensing agreements, in particular, to assist you in the negotiation, drafting, and review of these agreements.

Remember that a license agreement is in some ways, an agreement to lease use of something for a limited period of time. Most licensing agreements cover intellectual property including trademarks, copyrights, trade secrets, and patents. There are situations involving architectural plans and software, too. Those end user licensing agreements (EULA) that we all must accept before being allowed access to software is an example that everyone is familiar with. Businesses will encounter EULAs, but in this situation, there is no bargaining power on the part of the party seeking to use the software. Either you accept the licensing agreement as it is written, or you do not use the software.

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