Licensing, franchising and other contractual strategies

Rodrigo Martín Lama

A1402027

Licensing, franchising and other contractual strategies

Types of intellectual property

• Patent:

The patent gives the inventor the right to be the only one who can sell, use and make a specific product or process for a determined time.

• Copyright:

A copyright gives to the creator some special benefits, usually for a limited time, such as reproduce or use some work. The copyright don´t protect ideas or works themselves, only the way they are expressed.

• Industrial design right

An industrial design consists on the creation of a form or shape of determined product, such as a bottle (coca cola) or a design in two or three dimensions.

• Trademark

A trademark is a sign or logo recognized and protected which distinguishes a brand or a group of products or services.

• Trade secret

“Information, including a formula, pattern, compilation, program, device, method, technique, or process, that derives independent economic value, actual or potential, from not being generally known to or readily ascertainable through appropriate means by other persons who might obtain economic value from its disclosure or use; and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy” (Cornell University Law School, 1992).

Definition of Licensing?

• A licensing agreement is a legal contract between two parties, known as the licensor and the licensee. The licensor grants the rights to the licensee to sell produce or make a determined product service or process. The licensee has to pay for that rights.

Advantages and disadvantages of licensing

Advantages:

• Low risk
• Proven technology

Disadvantages:

• Dependence on the licensor
• Little access to the knowledge source
• Expensive

Definition of franchising?

Franchising is a business relationship in which the franchisor assigns to the franchisees (independent people) the permission to sell and distribute the franchisor goods during a fixed time, using his name and brand. The International Franchise Association defines franchising as a "continuing relationship in which the franchisor provides a licensed privilege to do business, plus assistance in organizing training, merchandising and management in return for a consideration from the franchisee".

Advantages and disadvantages of franchising

Advantages:

• Access to better talent
• Easily expansion
• Minimized risk

Disadvantages:

• Less control over managers
• Expensive

Examples of franchising

1. Anytime Fitness                
2. Hampton Hotels                
3. Subway                
4. Supercuts                
5. Jimmy John's Gourmet Sandwich Shops

Sources:

http://definitions.uslegal.com/l/licensing-agreements/

http://www.cipo.ic.gc.ca/eic/sit/cipointernet-internetopic.nsf/eng/h_wr02301.html

http://www.entrepreneur.com/article/226489

http://www.entrepreneur.com/franchise500/index.html

http://www.franchise.org.au/what-is-franchising-.htm

http://www.law.cornell.edu/wex/trade_secretl

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