Licensing in the age of global e-commerce, streaming, and connectivity.
By: David Ilganayev
(1L Delegate TV & FIlm)
What is Licensing? Licensing is a contract based arrangement whereby the licensor (the seller) allows its technology, products, brands, technology, content, patents, trademarks, designs, processes, intellectual property, or other proprietary advantages to be used for a fee by the licensee.
Everything from school lunchboxes covered in popular kids shows to hologram shows performed by deceased celebrities, always licensing agreements involved behind the scenes. Licensing is all around us, tech companies license out their software to hardware manufacturers all the time, i.e. Windows, Android and Chromebook operating systems which are all licensed out to the hardware manufacturers. There have been huge spats in all realms of licensing and it does not seem like it will go away anytime soon. We live in a global economy where goods and services are constantly exchanged between countries. As society is becoming more connected, people are identifying and becoming increasingly attached to brands, shows, and artists. Sports leagues such as the NBA, MLB, and NFL are constantly licensing their products out to various companies. Similarly, famous superhero entertainment companies Marvel, DC, and Capcom license their series'.
What happens when licensing does not pay everyone the royalties that they deserve? This is a constant question and many lawsuits have been filed pertaining to this issue. NCAA players have famously filed class actions against leagues and game manufacturers for failing to share in licensing profits. In one case NCAA players reached a $40 million settlement with video game manufacturers, similar issues with different components are common in different industries.
Today, a big part of our lives is online shopping, an online store familiar to most people is Amazon. Amazon sells nearly everything. Since 2014, Amazon has had over 2 million third-party sellers, these sellers have been able to sell their products without much interference. These third-party sellers can make a tremendous profit selling fake products, in effect the legitimate companies reputability and name get damaged. Amazon and Walmart marketplaces have tried to battle this issue but with the billions of items bought online each year, it is becoming increasingly difficult and expensive. Amazon did start their brand registry program in 2015, for brands, sellers, licencors, and the like; to protect their trademarked goods from being sold by infringing third-parties.
Licensing is a great form of profit for many people and companies, but it can also bring about damaging effects occurring from non-adherent licensees and those who produce without permission. Licensing law will continue to grow in conjunction with the growth of globalization and online content, domain names for example. The field might not be new but the arising issues need to be legally addressed.