Exclusive license
Exclusive license is a license limited to a specific range or a field, such as:
- time
- territory
- context
- market.
"Exclusive" means that the licensor agrees not to grant other licenses that have the same rights in a grant covered by the exclusive license.
Characteristics
It is characteristic for this license that it refers to the technological application, production and production method of a specific product and to the geographical area. The licensee must meet performance requirements.
Exclusivity includes competition from the licensor itself or other licensees. In fact, the licensor may issue any number of licenses in the same scope and with different rights or a license in various respects with the same rights. The licensee of a legally exclusive license is the owner of a particular right from several rights that constitute copyright. Against a person who violates the licensing of the law in the field of the licensee's right may be initiated court proceeding[1].
In a situation where the license is exclusive but at the same time limited to a specific area of use, both entities should precisely determine the extent to which the licensee has the right to defend, enforce and prosecute the right to property. Although the license is considered exclusive, other licenses may be granted in other fields, based on the same property rights. These activities can affect the value of the license, which is why other licensees may request to participate in the enforcement and prosecution of property rights.
Use
Exclusive license can be used to[2]:
- produce product
- sell product
- distribute product
- reproduce product
- use logo and trademarks of the product
- register any domain name
- exploit features of the product
- distribute product
Exclusive vs. Non-Exclusive licensing
The biggest difference that can be encountered when choosing a license is whether it is exclusive or non-exclusive. The main difference between the two licenses is that in the case of an 'exclusive license the parties usually agree that no other legal entity can use the product, except the licensee, while in the case of a non-exclusive license it grants to the licensee the right to exploit the product, but on a non-exclusive basis. That means that the licensor can still use the same product and he can also permit other licensees to use the same product's property[3].
The type of license affects other license terms, an example of which may be[4]:
- duties of diligence, which in the case of an exclusive license may be much more onerous than in a non-exclusive license
- it is likely that in the case of a non-exclusive license, the 'licensor may prohibit sub-licensing
- in the exclusive license, the licensee has more rights to enforce, recover and defend the product's property rights.
Examples of Exclusive license
- Music: An exclusive license for a particular song or album could be granted to a streaming service, such as Spotify, so that the song or album can only be streamed on that service.
- Technology: An exclusive license for a particular technology could be granted to a company so they can use the technology exclusively.
- Trademarks: An exclusive license for a particular trademark could be granted to a business so that they can use the trademark exclusively in their products or services.
- Patents: An exclusive license for a particular patent could be granted to a company so that they can use the patent exclusively in their products or services.
- Copyrights: An exclusive license for a particular copyright could be granted to a publisher so they can publish a book, movie, or other copyrighted material exclusively.
Advantages of Exclusive license
An exclusive license is a type of intellectual property license that grants the licensee exclusive rights to an invention or creation. The advantages of an exclusive license include:
- It grants the licensee exclusive commercial rights to manufacture, market, and distribute the invention or creation.
- It provides the licensee with a competitive edge as they are the only entity legally able to exploit the invention or creation.
- It provides the licensee with greater control over the invention or creation, allowing them to develop their own branding, pricing, and other marketing strategies.
- It provides the licensee with more flexibility to explore new business opportunities, such as licensing the invention to other companies.
- It allows the licensee to generate higher returns on their investment as they don’t have to share the profits from the invention or creation with other entities.
Limitations of Exclusive license
An exclusive license is a type of license that limits the use and distribution of a certain item or service to a specific user, field, or range. This type of license has several limitations that should be taken into consideration before using it, such as:
- Limited Scope: An exclusive license limits the scope of the license to a specific user or field, such as a single company or industry. This prevents others from using the same item or service, and limits the potential of the item or service.
- Limited Duration: An exclusive license is typically only valid for a limited period of time and must be renewed every year or every few years. This means that the user must continually pay fees to renew the license and must also adhere to the terms set out in the agreement.
- Limited Rights: In most cases, an exclusive license grants the user limited rights to use the item or service. This means that the user may not be able to modify, sell, or distribute the item or service in any way.
- High Costs: An exclusive license usually involves high costs, as the user must pay for the license, as well as any associated fees or royalties. This can be expensive for the user and prohibitive for some businesses.
A exclusive license is a license that limits the rights of a user to a specific range or field. There are several approaches that may be taken when it comes to exclusive licenses, such as:
- Sole Licensing: This approach grants exclusive rights to one party alone, allowing them to market and distribute their product without competition.
- Territorial Licensing: This approach grants exclusive rights to one party within a specified region or territory.
- Time-Limited Licensing: This approach grants exclusive rights to one party for a pre-determined period of time.
- Portfolio Licensing: This approach grants exclusive rights to one party for a set of products or services.
In conclusion, exclusive licenses are a way of granting exclusive rights to one party over a determined range or field, such as sole licensing, territorial licensing, time-limited licensing, or portfolio licensing.
Footnotes
| Exclusive license — recommended articles |
| Sole distributor — Sole agent — Residual payment — Patent Pending — Disclaimer of warranties — Working interests — Franchise fee — Easement In Gross — Phoenix company |
References
- Battersby G. J. and others, (2010), Drafting Internet Agreements, Aspen Publishers Online, p. 23
- Cannon J. and others, (2012), Get More Fans: The DIY Guide to the New Music Business: (2018 edition), Jesse Cannon, p. 669
- Heller J. S. and others, (2012), The Librarian’s Copyright Companion, Second Edition, William S. Hein & Co., Inc., p. 175
- Kulakowski E. C. and others, (2008), Research Administration and Management, Jones & Bartlett Publishers, p. 830.
Author: Justyna Urbanik
