At the time, you may have thought that a licensing agreement was a great way for your intellectual property to gain exposure, all while allowing you to collect additional revenues and royalties along the way. Unfortunately, you may realize that this agreement is working to your detriment if the licensee commits a breach of the agreement. Common breaches in New Jersey include unauthorized use, failure to pay owed royalties, and exceeding the scope of the rights you have extended as part of the agreement. Understanding what constitutes a breach and your rights is critical to protecting your intellectual property and determining when legal action may be necessary. Read on to discover what is considered a breach and how a seasoned New Jersey licensing agreement lawyer at The Ingber Law Firm can see if you have a case on your hands.
What Is Considered a Breach in a Licensing Agreement?
A breach of the licensing agreement in intellectual property law occurs when a licensee fails to comply with the contractual obligations that govern the use, payment, and scope of the rights. A licensing agreement is an agreement between you, a licensor, and another party, a licensee. Based on the terms and conditions within the agreement, a licensee gets clearance to use some of your specific intellectual property rights in a specific manner. In turn, you may earn revenues and royalties.
Common Examples of Licensing Agreement Breaches
- The licensee uses your intellectual property in a manner that is outside the bounds of the licensing agreement
- The licensee allows another party to use your intellectual property who is not authorized in the terms of your licensing agreement
- The licensee does not distribute the full amount of revenues or royalties that were promised in the terms of your licensing agreement
- The licensee continues to use your intellectual property even though the term of the licensing agreement has since expired
- The licensee unintentionally violates the terms due to a misunderstanding of the scope and its limitations, which is common in complex agreements
What Is the Difference Between Breach and Infringement?
While the terms are often used interchangeably, it’s critical to understand that, in intellectual property law, a breach and infringement are two distinct legal concepts. As such, understanding the difference is critical, as it can impact the type of legal claim you pursue and the subsequent damages available.
Breach vs. Infringement: What’s the Difference?
- A breach ultimately violates the terms of the contract
- Infringement violates intellectual property rights beyond permission
- A breach occurs when a licensee exceeds the limitations of permission granted within the contract, such as continuing to use the IP outside of the agreed upon timeframe
- Infringement in a licensing agreement occurs when intellectual property is used without permission or outside of the scope of the rights granted, which may violate federal intellectual property laws as infringement is governed by federal law, not contract terms
- In some instances, the same act can constitute both a breach and infringement claim
What Do I Need to Do to Remedy this Breach?
Rest assured, there are ways in which to remedy a breach in licensing agreements for intellectual property owners in Montclair, Bloomfield, and throughout Essex County and the surrounding communities. The most effective way, especially for a drastic breach, is to pursue legal action against the negligent licensee.
Legal Remedies Available for Licensing Agreement Breaches
- The actual damages you incurred, such as the loss of revenues and royalties
- The remedies dictated by the licensing agreement itself, such as arbitration and additional royalties
- Statutory damages, which is an award amount stipulated within the statute rather than the degree of harm you incurred
- An injunction, which is an equitable remedy that has the licensee refrain from committing a breach again in the future
- An order to pay for your legal fees, such as attorney fees and court fees
- An order for the cancellation of the licensing agreements
How Can You Prevent a Licensing Agreement Breach
Preventing a licensing breach is critical to protecting your intellectual property rights in Essex County and across New Jersey. As such, you should begin with a strong draft and continual monitoring of how the licensee is using your intellectual property.
Practical Steps to Protect Your IP
- Clearly define the scope, territory, duration, and permitted uses in your licensing agreement
- Include audit clauses that allow you to verify royalty payments and ensure compliance with agreement terms
- Regularly monitor how your IP is being used
- Enforce your rights immediately following a breach to maintain a strong legal position
- Work with an experienced property attorney to draft, review, and enforce agreements
Contact an Experienced Essex County Intellectual Property Attorney
In the end, you must do everything in your power to protect against the unlawful appropriation of your hard-earned intellectual property. This is to say that you must not question your instinct to retain the services of a competent Essex County, New Jersey intellectual property lawyer. Our team at The Ingber Law Firm will work to determine the legal option that best suits you. Contact us today to learn how we can represent you.