In the year 2021, businesses should seek to adopt new technologies in order to remain profitable, competitive, and innovative in the global market. Today, a vast majority of businesses are choosing to achieve their goals by collaborating with other organizations through outsourcing, licensing programs, strategic partnerships, acquisitions, or joint ventures. Every affiliation will require some form of licensing of intellectual property.

Intellectual property (IP) is an asset that could be exploited in a variety of ways and through effective licensing and strategic collaboration, the IP can provide mutual benefits for both vendors and customers alike. Information provided in the license will depend on what is being licensed, such as patents, copyright material, and registered designs. In addition to granting necessary rights to use the relevant technology, a technology license agreement will also usually cover the provision of design information. Other important information that should be provided includes technical information and assistance, royalties, performance, and the grant of rights.

Statistics indicate that in the year 2021, licensing activity has remained at an all-time high. Technology licensing provides those who need to learn to expand their business by creating new lines of revenue the opportunity to find and achieve their goals in a cost-effective manner. Like all other forms of agreements, however, technology licensing requires strategic negotiating in order to be successful.

Licenses could be granted to a business for a limited duration to use software and determine whether the purchase of the software is essential. The “trial” version of the software should be used to review and evaluate the software for a limited period of time. Trial versions could have limited features and an efficient agreement should outline these limitations.

Service-level agreements (SLAs) define the level of service to be expected from a vendor. These legal contracts lay out the metrics by which the service should be measured, along with the penalties or remedies applicable should the services agreed upon be not achieved. Although SLA templates can be easily searched for online, they are a critical component of all technology vendor contracts and should be unique to each individual business. Taking the time to search for a template accessible online will not include the intricacies regularly required in most technology transactions.

Subcontracts and professional services agreements (PSAs) are binding contracts that outline the services a vendor will provide another business or customer. Independent contractors or subcontractors carry out the services included in subcontracts whereas vendors provide the services detailed in PSAs.

Vendors with high-tech assets should be careful when it comes to lending their software technologies. When it comes to the nebulous world of IP, it can sometimes be difficult to define and enforce legal rights without a robust contract. Software and technology lenders should seek to secure their assets when a loan is made. A loaner agreement should define the penalties in the event of the failure of a business service or a default on a loan by a customer.

Consulting agreements can vary greatly, but they generally define the services that are to be retained, for a specific period of time and under a specific rate of compensation. In a contract, a statement of work (SOW) for consulting services should be clarifying and should also communicate details of a project to vendors, contractors, and customers alike. An SOW will describe the scope of work, project of service, and deliverables to be legally expected. Negotiating is indispensable in consulting agreements and SOWs.

All enforceable legal agreements consist of three elements – an offer, acceptance, and consideration. Offers become legally enforceable when they are accepted. Acceptance tests can be demanded by customers to ensure the product works the way it was intended to and to gain the confidence of the product.

Original equipment manufacturer (OEM) agreements are used by companies that take components of a product from one or more parties to build another product that is then sold under that company’s brand and name. IT products and the companies that own them form ambiguous relationships as a result of the blurred lines between the designers, resellers, and manufacturers. An OEM agreement should address issues regarding quality assurance, confidentiality, payment, branding, as well as time frames.

If you engage a third party to act as a sales agent for you with a specific customer, group of customers or within a territory, you are still the party contractually responsible to the customer. A referral agreement might make be well suited to define and control that sales referral relationship. They generally offer your products under your terms under your quote, and the agent would be entitled to compensation upon completion of that sale and customer payment. However, it is important to define each parties rights with respect to future sales with that customer, renewals, can the agent offer other products, etc.

Helping clients identify and navigate the legal risks associated with their business can provide solutions. Providing effective legal advice and managing relationships with outside counsel can allow vendors and customers alike the opportunity to focus on other vital aspects of their business.