The intellectual property of a business can give it a competitive advantage and may also provide a stream of revenue. In addition to monetizing original creative works and selling patented products, businesses can also license their intellectual property to other organizations.
Companies in the same industry or adjacent ones may want to license patents for their manufacturing facilities. Other times, licensing may allow for the use of copyrighted materials. In scenarios where a party that previously signed a licensing agreement violates the terms of that agreement, litigation may be necessary to protect the intellectual property rights of the company that initially authorized the licensing agreement.
How can litigation help?
Overproducing products using a patent, failing to provide payment as agreed upon or choosing not to renew the licensing agreement while still making use of the intellectual property are all common licensing violations. These actions can impact the revenue of the company licensing its intellectual property.
Civil litigation offers several important forms of relief for the company affected by the violation of the licensing agreement. Judges can enforce licensing agreements, holding the company in violation of the arrangement responsible for any fees that they did not previously pay or issuing injunctions limiting future use of the protected intellectual property.
The organization that owns the intellectual property could also request damages based on the practical implications of the contract violations. Judges can also enforce penalty clauses in cases where the original contract imposed specific financial consequences for certain types of violations.
Businesses that have proof of licensing contract violations and the impact that those violations have on the company can hold the other organization accountable. Pursuing intellectual property litigation reduces the harm one company may cause to another and helps an organization protect its competitive advantages.