How Can A Company Use Licensing Agreements To Enter World Markets

1. Brand Identity. In the first place, a clothing company that wishes to become a licensor must verify whether an international licensing agreement will improve and improve the company`s brand. Putting the trademark in the hands of a foreign licensee requires proper due diligence, as the risk of damage caused by the trademark exists. Licensing is a way to introduce a brand into new stores, geographic markets and distribution channels that would otherwise not be available without investing more in new manufacturing processes, machinery or plants, while retaining control of the brand image. This is very attractive for companies that are new to international business. On the other hand, the granting of international licenses is a mode of entry abroad that has some disadvantages and reasons why companies should not use it, since it exists that in this type of entry, the transfer of knowledge between the parent company and the licensee is important, the decision to conclude an international license agreement depends on: the host government`s respect for intellectual property, and the licensor`s ability to choose the right partners and prevent them from competing in each other`s market. Licensing is a relatively flexible employment contract, which can be tailored to the needs and interests of both the licensor and the licensee. The essential benefits and reasons for using an international license for international expansion are listed below: if the agreement does not work and the licensor wishes to terminate the contract before the expiry of its term, clearly defined termination clauses must be included in the contract. As with other agreements, the parties should be able to terminate the licence agreement in the event of a material breach. On the other hand, a small business must ensure that it protects the information it shares with a foreign company as part of its licensing strategy. Export.gov, a department of the U.S. administration, recommends that all patents and trademarks be registered in any country where a small business does business to protect its interests.

A foreign company could use the intellectual information a company provides to start producing its own products and turn into a competitor instead of an employee. A foreign-based company enters into an agreement by purchasing the intellectual property rights of a U.S.-based company. These rights allow the foreign company to manufacture products using the patents, designs, and specifications of the U.S.-based company in order to reproduce the products as accurately as possible in their home country. Agreements normally set out the duration of its entry into force and the restrictions that the foreign company must comply with in the manufacture and marketing of products. Licensing in global markets has significant advantages, but apparel companies should consider a number of other factors, such as. B the many cultural, linguistic, political, legal and financial differences that exist in different countries. For a licence to exist, there must be a contract between two or more parties that explains the ownership rights that the licensor gives to the licensee. This agreement or agreement is referred to as the license agreement….

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