BASICS OF LICENSING

1. License
Agreement
SUBMITTED TO:
(Asstt. Prof.) Dr. Manju Nehra
(Prof.)Dr. Urmila Pannu
SUBMITTED BY:
Ishpal Singh
(M.V.Sc Ist year ,Deptt. Of animal
Genetics and Breeding,
CVAS, Bikaner)

2.  License agreement
 Objectives
 List of industries in which license agreement is
compulsory.
 Reasons for licensing.
 Benefits of licensing for a licensor and a
licensee.
 Major elements of a license agreement.
 License agreement flow chart.
 Conclusion

3.  It is an contractual agreement between two
business entities whereby the licensor (selling
firm) allows the licensee (the buying firm) to
use its Technology ,Patents , Trademarks,
Designs ,Processes ,Intellectual property in
exchange for a fee or a royalty.

4.  According to Andrew Wakefield the transfer
of rights to manufacture or market a particular
product to another individual or organization
through a legal arrangement or contract.
 It usually requires that a fee ,commission, or
royalty is paid to the licensor.

5.  The major objective of licensing system is to
give effect to the industrial policy of the
government.
 To regulate the location of industrial units so
as to secure a balanced regional development.
 To protect and promote small scale sector.
 To regulate foreign capital and technology.

6.  To maintain a proper demand-supply balance.
 To encourage exports and the substitution of
imports.
 To conserve foreign exchange.
 To ensure the use of large scale economies and
proper technology

7.  Coal and lignite.
 Petroleum(refined) and its distillation
products.
 Distillation and brewing of alcoholic drinks.
 Cigars and cigarettes of tobacco and
manufactured , tobacco substitutes.

8.  Electronic aerospace and defense equipment of
all types
 Industrial explosives including detonating
fuse ,safety fuse, gun power , nitrocellulose
and machines.
 Hazardous chemicals
 Drugs and pharmaceuticals.

9.  Licensors (sellers) Point of View:
1. Lack capital, management resources,
market knowledge to exploit directly by export or FDI,
so license to a local firm
2. Use licensing as a way to test the market (but is this
unfair to local licensee?)
3. We can get money for an invention or technology
which is outside our core competence
4. Local market may be too small -problem
of economies of scale.

10. 5. Avoid or minimize political factors/risks-
restrictions on imports-restrictions on FDI-require
majority foreign ownership-high risk of
nationalization
6. Possible high rate of obsolescence / short
product life cycle for new technology maximize
scope for exploitation

11. 1. Increasing its brand presence at retail or
distribution outlet
2. Creating further brand awareness to support its
core products or services
3. Supporting and enhancing its core values
by associations with the licensed products or
services (e.g. association with a healthy food or
with a cutting edge mode of fashion).

12. 4.Entering new markets (consumer or
geographical) which were unfeasible with it’s own
resources or capabilities.
5.Generating new revenue streams, often
with little involvement or additional financial or
other resource implications

13. 1. Transferring the values and consumer favor
towards the property to the licensed product or
service
2. Providing added value and differentiation from
competitive offerings
3. Providing additional marketing support or
momentum from the core property’s activity
provided by the licensor

14. 4. Appealing to new target markets who have not
historically been interested in a licensee’s product
or service
5. Giving credibility for moving into new market
sectors through product extension
6. Gaining additional retail space and favor.

15. 1.Covers the financial arrangement
between two parties.
2.Establishes the time frame of the deal.
3.Address the issue of quality.
4.Which party maintains control of copyrights,
Patents, or trademarks
5.Specify how disputes will be resolved in which
Court.

17.  The law around licensing is fact specific,
complex, and sometimes contradictory.
 License agreement should always be done with
the mutual consent of both licensor and
licensee.
 Benefits for acquiring and giving license should
be first taken into consideration.
 So one needs to have a legal advisory before
issuing and before attaining a license
agreement .

18. THANK YOU