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  • Curington Law, LLC

What to Do When a Licensing Agreement is Violated



Licensing agreements are a common occurrence in business transactions today. In simple terms, these agreements provide a legal way for one party to use another's intellectual property rights in exchange for payment. These intellectual property rights can range from patents, trademarks, copyrights, and other proprietary information. While these agreements have their benefits, they can also be breached, leading to a legal impasse. As a license holder or attorney, what do you do when a licensing agreement is violated? In this blog post, we will take a closer look at the steps to take when faced with such a situation.


1. Review the Terms of the Agreement


The first step in handling a licensing agreement violation is to review the terms of the agreement. This will help you identify the specific provisions that have been breached. It's important to determine whether the breach is a minor or major violation as this will dictate what actions you need to take. A minor breach might only require a warning or a notice of non-compliance, while serious violations could lead to termination of the agreement or even legal action.


2. Communicate with the Other Party


The next step is to communicate with the other party. This can be done formally or informally, depending on the circumstances. In many cases, the breach of the agreement might have been an unintentional error. In such cases, a simple communication highlighting the breach and the measures to address it might be all that's needed. However, if the other party fails to respond or continues with the violation, then you may need to take further steps.


3. Send a Notice Letter


If the informal communication did not yield any results, you should consider sending a formal notice letter. This letter should outline the terms of the agreement, the specific breaches, and the consequences of non-compliance. A notice letter is often taken more seriously than verbal communication and is usually the first step in legal action if the other party still fails to comply.


4. Document Everything


Throughout the entire process, it is vital to document everything. This includes all communication, court filings, and any other relevant information. By keeping detailed records, you can provide evidence of the violations and actions taken to enforce the agreement. This information can be critical in court proceedings or any negotiations outside of court.


5. Consider Alternative Dispute Resolution


If the other party refuses to comply with the agreement terms, then alternative dispute resolution (ADR) might be the next step. This involves bringing in a neutral third party to mediate the dispute. Options for ADR can include arbitration or mediation. ADR is often a faster and less expensive option compared to going to court.


6. Take Legal Action


If ADR fails or is not a viable option, then the final step would be to take legal action. This could involve filing a lawsuit or arbitration proceedings to enforce the terms of the agreement. Legal action should be the last resort and is often a time-consuming and expensive process that should only be considered when all other avenues have been exhausted.


In conclusion, licensing agreements are an essential part of many business transactions, but breaches can happen. As a license holder or attorney, it's important to understand the steps to take when a licensing agreement is violated. These steps include reviewing the agreement, communicating with the other party, sending notice letters, considering alternative dispute resolution, and taking legal action if necessary. By taking these steps, you can help ensure that the terms of the agreement are enforced and that your intellectual property rights are protected.


For more information and assistance with licensing agreements and arbitration, contact Curington Law, LLC at (312) 766-6671 or online.

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