Licensing

A Licensing Agreement is a legal contract between two parties—the licensor (the owner of the intellectual property) and the licensee (the party seeking to use the intellectual property)—that grants the licensee permission to use the licensor’s intellectual property (IP) under specific conditions. The agreement outlines the scope of use, payment terms (e.g., royalties or licensing fees), duration, and other key details of the arrangement. The primary purpose of a licensing agreement is to allow the licensee to legally use the IP while protecting the rights of the licensor.

Key Components of a Licensing Agreement:

1. Parties Involved:

   • The agreement identifies both the licensor (the IP owner) and the licensee (the user of the IP), including their legal names and contact information.

2. Description of the Licensed Property:

   • The agreement provides a detailed description of the intellectual property being licensed. This may include:
     • Trademarks: Logos, brand names, slogans.
     • Copyrights: Books, music, software, images, or videos.
     • Patents: Inventions, processes, or technological innovations.
     • Trade Secrets: Proprietary business information, formulas, or processes.

3. Grant of License:

   • The agreement specifies the type of license being granted, including:
     • Exclusive License: The licensee has exclusive rights to use the IP, and the licensor cannot grant the same rights to anyone else.
     • Non-Exclusive License: The licensor can grant the same rights to multiple licensees.
     • Sublicense: The licensee may be permitted to grant sublicenses to third parties.
     • Territorial Rights: Specifies the geographic scope of the license (e.g., regional, national, global).

4. Scope of Use:

   • The agreement defines the permitted uses of the licensed IP, including:
     • Purpose: How the IP can be used (e.g., for manufacturing, distribution, marketing).
     • Field of Use: The specific industry or field in which the IP can be used (e.g., medical devices, consumer electronics).
     • Limitations: Any restrictions on use (e.g., not allowing the IP to be used in certain industries or markets).

5. Royalties and Payment Terms:

   • The agreement outlines the payment structure, including:
     • Upfront Fees: A one-time payment made by the licensee to the licensor at the start of the agreement.
     • Royalties: Ongoing payments based on a percentage of sales, revenue, or profits generated from the licensed IP.
     • Minimum Royalties: A guaranteed minimum payment to the licensor, regardless of sales.
     • Payment Schedule: Specifies when and how payments are due (e.g., monthly, quarterly, annually).

6. Duration and Renewal:

   • The agreement specifies the term (duration) of the license, including:
     • Fixed Term: A set period (e.g., 5 years), with an option to renew upon mutual agreement.
     • Perpetual License: An ongoing license without an expiration date, unless terminated.
     • Renewal Terms: Conditions under which the agreement can be renewed or extended.

7. Quality Control and Compliance:

   • The licensor may include quality control provisions to ensure that the licensed IP is used consistently and in a way that maintains its value. This can include requirements for the licensee to meet specific standards or obtain the licensor’s approval for certain uses.

8. Intellectual Property Rights and Ownership:

   • The agreement clarifies that the licensor retains ownership of the IP, and the licensee only has the rights granted by the license. It may also address any improvements or modifications made by the licensee.

9. Confidentiality:

   • The agreement includes a confidentiality clause, requiring the licensee to protect any proprietary or sensitive information related to the licensed IP.

10. Indemnification and Liability:

    • The agreement typically includes indemnification clauses, stating that the licensee will hold the licensor harmless from any legal claims or damages arising from the use of the IP.

11. Termination Clause:

    • The agreement outlines the conditions under which either party can terminate the license, including:
      • Termination for Breach: If one party fails to meet its obligations.
      • Termination for Convenience: By mutual agreement or with advance notice.
      • Effects of Termination: Specifies what happens to the licensed IP after the agreement ends (e.g., discontinuing use, returning materials).

12. Governing Law and Jurisdiction:

    • This section specifies the jurisdiction and governing law that will apply in case of legal disputes.

When is a Licensing Agreement Used?

• Software Licensing: When a software company grants users the right to use its software under specific terms (e.g., Microsoft Office, Adobe Creative Cloud).
• Franchising: When a franchisor grants a franchisee the right to use its brand, trademarks, and business model (e.g., McDonald’s).
• Merchandising: When a brand licenses its logos or characters for use on products (e.g., Disney characters on toys and clothing).
• Music and Film: When a musician or film producer grants rights to use their work in commercials, movies, or TV shows.
• Patent Licensing: When an inventor licenses a patented technology to a company for manufacturing or distribution.

Example

A tech startup holds a patent for a unique battery technology. The company enters into a Licensing Agreement with a major electronics manufacturer. The agreement includes:

• Exclusive License: The electronics manufacturer receives exclusive rights to use the battery technology in its consumer products.
• Royalties: The manufacturer will pay a 5% royalty on all sales of products using the licensed technology.
• Quality Control: The manufacturer must follow specific guidelines to ensure the technology is used correctly.
• Term: The agreement is for a period of 10 years, with an option to renew for an additional 5 years.

Pros and Cons of a Licensing Agreement:

Pros:

• Revenue Generation: The licensor can earn royalties and fees without directly manufacturing or selling products.
• Market Expansion: The licensee gains access to valuable IP, which can enhance its product offerings and competitive edge.
• Risk Reduction: The licensor reduces financial risk by allowing another party to commercialize the IP.
• Increased Brand Visibility: Licensing can help increase brand recognition and reach new markets.

Cons:

• Loss of Control: The licensor may have limited control over how the IP is used, which can affect brand reputation.
• Quality Issues: The licensee’s failure to maintain quality standards can harm the value of the licensed IP.
• Complex Agreements: Licensing contracts can be complex and require careful drafting to avoid misunderstandings and legal disputes.
• Risk of Infringement: If the licensee misuses the IP, it could lead to infringement claims or damage to the licensor’s rights.

Legal Considerations:

1. Due Diligence:

   • Both parties should conduct thorough due diligence to verify the validity of the IP and the licensee’s ability to commercialize it effectively.

2. Compliance with IP Laws:

   • The agreement must comply with relevant intellectual property laws, including trademark, copyright, and patent laws.

3. Anti-Competition Laws:

   • Ensure the licensing agreement does not violate antitrust or anti-competition laws by creating unfair market conditions.

4. Dispute Resolution:

   • Include a clear process for resolving disputes, such as mediation, arbitration, or litigation.

Difference Between a Licensing Agreement and a Franchise Agreement:

• Licensing Agreement: Grants rights to use specific IP (e.g., a trademark, patent) without involving the entire business model.
• Franchise Agreement: Involves the right to operate a business using the franchisor’s entire system, including trademarks, branding, and business practices.

A Royalty Agreement is a legal contract between two parties—the licensor (the owner of an intellectual property or asset) and the licensee (the party seeking to use that asset)—that outlines the terms for the use of the licensor’s property in exchange for royalty payments. Royalties are periodic payments, typically based on a percentage of revenue or sales generated from the use of the intellectual property. The agreement specifies the scope of the license, the royalty rate, payment terms, and other conditions governing the use of the IP.

Key Components of a Royalty Agreement:

1. Parties Involved:

   • The agreement identifies the licensor (the owner of the IP or asset) and the licensee (the party using the asset), including their legal names and contact information.

2. Description of the Licensed Property:

   • The agreement provides a detailed description of the intellectual property or asset being licensed. This can include:
     • Patents: Inventions, designs, or processes protected by patent rights.
     • Trademarks: Logos, brand names, or slogans used in commerce.
     • Copyrights: Works of authorship, such as books, music, films, or software.
     • Trade Secrets: Confidential business information, formulas, or proprietary processes.
     • Natural Resources: Rights to extract natural resources like oil, gas, or minerals.

3. Grant of License:

   • The agreement specifies the type of license granted, which may be:
     • Exclusive License: The licensee has exclusive rights to use the IP, and the licensor cannot grant the same rights to anyone else.
     • Non-Exclusive License: The licensor can grant the same rights to multiple licensees.
     • Sublicense Rights: The licensee may have the right to grant sublicenses to third parties.

4. Royalty Payment Terms:

   • The agreement outlines the payment structure, including:
     • Royalty Rate: The percentage or fixed amount paid by the licensee, typically based on sales revenue, units sold, or a flat fee.
     • Payment Frequency: Specifies when royalty payments are due (e.g., monthly, quarterly, annually).
     • Minimum Royalty: A guaranteed minimum payment to the licensor, regardless of the licensee’s sales performance.
     • Advance Payment: An upfront payment made by the licensee at the start of the agreement, which may be credited against future royalties.

5. Audit and Reporting Requirements:

   • The agreement typically requires the licensee to provide regular reports detailing sales, revenue, or other metrics used to calculate royalties. It may also grant the licensor the right to audit the licensee’s financial records to ensure accurate royalty payments.

6. Scope of Use and Territory:

   • The agreement specifies the scope of use, including:
     • Field of Use: The specific industry or market segment in which the IP can be used (e.g., consumer electronics, medical devices).
     • Territory: The geographic area where the licensee is permitted to use the IP (e.g., regional, national, or global rights).
     • Permitted Uses: How the licensee may use the IP (e.g., manufacturing, distribution, marketing).

7. Duration and Termination:

   • The agreement outlines the duration of the license, including:
     • Fixed Term: A specific period (e.g., 5 years), with an option to renew upon mutual agreement.
     • Perpetual License: An ongoing license without an expiration date, unless terminated.
     • Termination Clause: Conditions under which either party can terminate the agreement (e.g., breach of contract, non-payment of royalties).

8. Quality Control and Compliance:

   • The licensor may include quality control provisions to ensure that the licensed IP is used properly and consistently. The licensee may be required to meet specific standards and obtain approval from the licensor for certain uses.

9. Intellectual Property Rights and Ownership:

   • The agreement clarifies that the licensor retains ownership of the IP and grants the licensee only the rights specified in the agreement. Any improvements or modifications made by the licensee may also be addressed.

10. Confidentiality and Non-Disclosure:

    • The agreement includes a confidentiality clause, requiring both parties to protect any proprietary information shared during the relationship.

11. Indemnification and Liability:

    • The agreement typically includes indemnification clauses, stating that the licensee will hold the licensor harmless from any legal claims or liabilities arising from the use of the IP.

12. Dispute Resolution:

    • The agreement outlines the process for resolving disputes, which may include negotiation, mediation, arbitration, or litigation.

13. Governing Law and Jurisdiction:

    • The agreement specifies the jurisdiction and governing law that will apply in the event of a legal dispute.

When is a Royalty Agreement Used?

• Patent Licensing: When an inventor grants a company the right to use a patented technology in exchange for royalties.
• Trademark Licensing: When a brand licenses its logo or trademark for use on products, such as merchandise or promotional items.
• Copyright Licensing: When a musician licenses a song for use in films, commercials, or streaming platforms, or when software is licensed for commercial use.
• Resource Extraction: When a company pays royalties to a landowner or government for the rights to extract natural resources, such as oil or minerals.
• Franchising: When a franchisor grants a franchisee the right to use its business model and trademarks in exchange for royalty payments.

Example

A software company develops a unique algorithm and licenses it to a tech firm for use in its new product line. The Royalty Agreement includes:

• Royalty Rate: The tech firm will pay a 7% royalty on gross sales of the products using the algorithm.
• Payment Terms: Royalties are due quarterly, with a minimum annual royalty payment of $50,000.
• Scope of Use: The licensee may use the algorithm only in consumer electronics products.
• Duration: The agreement lasts for 5 years, with an option to renew for an additional 3 years.
• Audit Rights: The software company has the right to audit the licensee’s sales records once per year.

Pros and Cons of a Royalty Agreement:

Pros:

• Revenue Generation: Provides a source of ongoing income for the licensor without requiring direct involvement in production or sales.
• Market Expansion: Allows the licensee to leverage established IP to enhance its product offerings and competitive position.
• Risk Mitigation: Reduces the licensor’s financial risk by sharing the commercialization responsibilities with the licensee.
• Flexibility: Can be tailored to fit the specific needs and goals of both parties.

Cons:

• Complexity: Royalty agreements can be complex and may require detailed negotiation and legal review.
• Quality Control Issues: If the licensee fails to meet quality standards, it can harm the licensor’s brand or IP value.
• Disputes Over Payments: Disagreements may arise over royalty calculations, audit rights, or payment accuracy.
• Dependence on Licensee: The licensor’s income may be dependent on the licensee’s sales performance, which can be unpredictable.

Legal Considerations:

1. IP Ownership Verification:

   • The licensor must verify ownership of the IP and ensure that it is free of encumbrances before entering into a royalty agreement.

2. Compliance with IP Laws:

   • The agreement must comply with relevant intellectual property laws, including copyright, trademark, and patent laws.

3. Antitrust and Competition Laws:

   • The agreement must not violate antitrust or competition laws, especially if it involves exclusive licensing arrangements.

4. Tax Implications:

   • Both parties should consider the tax implications of royalty payments, as they may be subject to withholding taxes or other regulatory requirements.

Difference Between a Royalty Agreement and a Licensing Agreement:

• Royalty Agreement: Focuses specifically on the payment of royalties in exchange for the use of IP. It often includes detailed terms for calculating and paying royalties.
• Licensing Agreement: A broader contract that grants rights to use IP and may include royalty payments as one aspect but also covers other licensing terms and obligations.

Would you like a sample template of a Royalty Agreement, or do you need additional details on specific clauses to include?

A wide range of assets and intellectual property (IP) can be licensed. Here are the common types of things that are often licensed:

1. Intellectual Property (IP)

• Trademarks:
  • Logos, Brand Names, and Slogans: Companies license their brand identity to other businesses for use on products, packaging, and marketing materials (e.g., Disney characters on toys, Nike’s “Just Do It” slogan).
• Copyrights:
  • Books, Music, and Films: Copyright holders license their creative works for use in movies, commercials, streaming platforms, or publications (e.g., a song used in a movie soundtrack, a book adapted into a film).
  • Software: Software companies often license their products, such as operating systems (Windows), productivity tools (Microsoft Office), and design software (Adobe Creative Cloud), to users or businesses under specific terms.
• Patents:
  • Inventions, Processes, and Technologies: Patent holders license their inventions to manufacturers or other companies for commercialization (e.g., pharmaceutical patents, industrial processes, new technologies in consumer electronics).
• Trade Secrets:
  • Proprietary Information: Businesses may license trade secrets like formulas, recipes, or proprietary processes (e.g., Coca-Cola’s secret formula, KFC’s seasoning blend).

2. Franchises

• Business Models and Trademarks:
  • Franchise agreements involve licensing an entire business model, including the brand, operating procedures, and trademarks (e.g., McDonald’s, Subway, Dunkin’ Donuts). Franchisees pay royalties to operate under the franchisor’s brand.

3. Product and Merchandise Licensing

• Branded Products:
  • Companies license their brands for use on products like clothing, accessories, toys, and collectibles (e.g., Marvel characters on apparel, Star Wars merchandise).
• Celebrity Endorsements:
  • Celebrities often license their name, likeness, or image to brands for promotional purposes (e.g., Michael Jordan’s likeness licensed for Air Jordan shoes).

4. Technology and Software Licensing

• Software as a Service (SaaS):
  • Companies license software on a subscription basis, giving users access to cloud-based services and applications (e.g., Salesforce, Zoom, Google Workspace).
• Application Programming Interfaces (APIs):
  • Businesses license their APIs to third-party developers, allowing them to integrate specific functionalities into their own applications (e.g., Google Maps API, PayPal API).
• Hardware and Device Licensing:
  • Technology companies may license their designs or specifications to hardware manufacturers (e.g., Qualcomm licensing its chip designs, Apple licensing its technology for third-party accessories).

5. Real Estate and Property Licensing

• Licensing of Space:
  • Businesses may license the use of physical space for specific purposes (e.g., kiosks in malls, pop-up shops).
• Air Rights and Mineral Rights:
  • Property owners can license air rights (for construction above buildings) or mineral rights (for extraction of oil, gas, or minerals).

6. Content and Media Licensing

• Stock Photos and Videos:
  • Photographers and videographers license their images and footage for use in media, advertising, and publications (e.g., Shutterstock, Getty Images).
• Television and Film Distribution:
  • Studios license TV shows and movies for streaming on platforms like Netflix, Hulu, or Amazon Prime.
• Publishing Rights:
  • Authors and publishers license the rights to publish books, articles, or other written content in various formats (e.g., e-books, audiobooks).

7. Music Licensing

• Public Performance Rights:
  • Musicians and composers license their songs for public performances, such as in concerts, radio, and public venues (e.g., ASCAP, BMI).
• Synchronization Licenses:
  • Music is licensed for use in synchronization with visual media, like films, TV shows, or commercials (e.g., a pop song used in a movie trailer).
• Mechanical Rights:
  • Licenses are granted for the reproduction of music recordings, such as for CDs, vinyl records, or digital downloads.

8. Educational and Academic Licensing

• Textbooks and Course Materials:
  • Publishers license educational content, such as textbooks, courseware, and e-learning materials, to schools and institutions (e.g., Pearson, McGraw-Hill).
• Research Databases:
  • Universities and research institutions license access to scientific databases and academic journals (e.g., JSTOR, ScienceDirect).

9. Natural Resources and Extraction Licensing

• Oil, Gas, and Mining Rights:
  • Companies license the rights to extract natural resources from land owned by individuals, corporations, or governments (e.g., drilling rights for oil and gas companies).
• Timber Rights:
  • Forest landowners may license the rights to harvest timber on their property.

10. Licensing in the Food and Beverage Industry

• Recipe and Product Formulas:
  • Restaurants or food companies may license proprietary recipes or formulations (e.g., licensing a popular sauce recipe for retail sale).
• Brand Licensing:
  • Popular food and beverage brands may license their name for use in other products (e.g., Starbucks coffee-flavored ice cream).

11. Gaming and Entertainment Licensing

• Video Game Licensing:
  • Game developers license content from movies, TV shows, or comics for use in video games (e.g., Star Wars licensed content in games).
• Gambling and Lottery Licenses:
  • Companies must obtain licenses to operate gambling or lottery services in specific jurisdictions (e.g., casino operations, online sports betting platforms).

12. Telecommunications and Spectrum Licensing

• Frequency Spectrum:
  • Governments license the rights to use specific radio frequency bands for telecommunications, broadcasting, and wireless services (e.g., 5G spectrum licenses).
• Telecom Infrastructure:
  • Companies may license the use of telecommunications infrastructure, such as cell towers or fiber-optic networks.

13. Sports and Team Licensing

• Team Logos and Merchandise:
  • Sports leagues license team logos, names, and other branding for use on apparel, merchandise, and promotional items (e.g., NFL jerseys, NBA apparel).
• Broadcast Rights:
  • Sports organizations license the rights to broadcast games on TV, radio, and online platforms (e.g., licensing agreements with ESPN or NBC Sports).

14. Data Licensing

• Licensing of Data Sets:
  • Companies license access to proprietary data sets, such as financial data, market research, or consumer analytics (e.g., Bloomberg Terminal, Nielsen data).
• Consumer Data and Analytics:
  • Businesses may license customer data for targeted advertising and market analysis, subject to data privacy laws and regulations.

15. Fashion and Design Licensing

• Fashion Brand Licensing:
  • Designers and fashion brands license their names for use in product lines, such as perfumes, eyewear, or accessories (e.g., Calvin Klein fragrance, Ralph Lauren eyewear).
• Interior Design and Decor:
  • Designers license their patterns, artwork, or designs for use on home decor products like wallpaper, textiles, and furniture.

Summary

Licensing is a versatile tool used across industries to monetize intellectual property, expand market reach, and create new revenue streams without direct involvement in production or distribution. It offers benefits for both the licensor (e.g., revenue generation, brand expansion) and the licensee (e.g., access to established IP, reduced R&D costs).

An Assignment of License is a legal document that transfers the rights and obligations of an existing license from one party (the assignor) to another party (the assignee). The original license holder (the assignor) transfers their interest in the license to the assignee, effectively replacing the assignor as the new holder of the license. This transfer must typically be approved by the original licensor (the owner of the intellectual property or rights being licensed) unless the original licensing agreement allows for assignment without consent.

Key Features of an Assignment of License:

1. Parties Involved:

   • The document identifies the assignor (the current license holder), the assignee (the new party receiving the license), and the licensor (the original owner of the rights or intellectual property).

2. Description of the Original License:

   • The agreement includes a clear description of the original license, specifying the rights and obligations being transferred. This may include the type of license (e.g., software license, trademark license, patent license), the scope of use, and any existing terms and conditions.

3. Scope of Assignment:

   • The document outlines the scope of the assignment, specifying whether the entire license is being transferred or only a portion of the rights and obligations. It should clarify whether the assignment is:
     • Full Assignment: The entire license, including all rights and obligations, is transferred to the assignee.
     • Partial Assignment: Only specific rights or portions of the license are transferred, with the assignor retaining some interest.

4. Approval and Consent:

   • In most cases, the original licensor’s consent is required for the assignment to be valid, unless the original licensing agreement explicitly allows for assignment without approval. The licensor’s consent may be included as part of the assignment agreement or provided separately.

5. Representations and Warranties:

   • The assignor typically provides representations and warranties, assuring the assignee that:
     • The license is valid and in good standing.
     • The assignor has the legal right to transfer the license.
     • There are no existing breaches or violations of the original licensing agreement.

6. Transfer of Rights and Obligations:

   • The agreement specifies that the assignee assumes all rights, responsibilities, and obligations of the original license. This includes complying with the terms of the original licensing agreement, such as payment of royalties or fees, adherence to usage restrictions, and maintaining quality standards.

7. Consideration:

   • The assignment may involve a payment or other consideration provided by the assignee to the assignor in exchange for the transfer of the license. The agreement should specify the amount, method of payment, and any payment terms.

8. Indemnification:

   • The agreement may include an indemnification clause, stating that the assignor will indemnify the assignee for any claims or liabilities arising from breaches of the original license before the assignment date.

9. Termination Clause:

   • The agreement should outline any termination rights, specifying under what conditions the assignment can be terminated by the parties involved, and what happens to the license in the event of termination.

10. Governing Law and Jurisdiction:

    • The document specifies the jurisdiction and governing law applicable to the assignment, in case of legal disputes.

When is an Assignment of License Used?

• Business Acquisitions: When a company acquires another business and needs to transfer existing licenses (e.g., software, patents, trademarks) to the new ownership.
• Reorganization or Merger: During corporate restructuring, mergers, or spin-offs, when licenses need to be assigned to a new entity.
• Change of Control: When there is a change in the controlling party of the business holding the license, and the new party assumes the rights and obligations of the license.
• Exit of a Partnership: When one partner leaves a business and transfers their licensed rights to another partner or a third party.

Example

A software company (Assignor) holds a license to use patented technology from a third-party licensor. The company is being acquired by a larger tech firm (Assignee). An Assignment of License Agreement is drafted, including:

• Consent: The third-party licensor agrees to the assignment of the license to the acquiring company.
• Transfer of Rights: The acquiring company (Assignee) will assume all rights and obligations of the original license, including payment of royalties and adherence to usage terms.
• Consideration: The assignor receives a payment of $100,000 from the assignee for the transfer of the license.
• Indemnification: The assignor indemnifies the assignee against any claims arising from breaches of the original licensing agreement before the assignment date.

Pros and Cons of an Assignment of License:

Pros:

• Flexibility: Allows for the transfer of valuable licensing rights during mergers, acquisitions, or changes in business structure.
• Continuity: Ensures that the license can continue to be used by the new holder without disruption, preserving the value of the IP.
• Legal Clarity: Clearly defines the transfer of rights and obligations, reducing the risk of disputes.

Cons:

• Licensor Consent Required: In many cases, the original licensor’s consent is required, which can delay the process or lead to negotiation challenges.
• Complexity: The process can be complex, particularly for high-value or exclusive licenses, requiring careful review of the original licensing terms.
• Risk of Breach: The assignor may still be liable for any breaches or obligations arising before the assignment, leading to potential legal exposure.

Legal Considerations:

1. Review the Original Licensing Agreement:

   • The parties must review the original license agreement to determine if it permits assignment, whether consent is required, and if there are any restrictions on assignment.

2. Obtain Licensor Consent:

   • In most cases, the licensor’s written consent is required before the license can be assigned. Failure to obtain consent may render the assignment invalid.

3. Compliance with IP Laws:

   • The assignment must comply with relevant intellectual property laws, including trademark, copyright, and patent laws.

4. Record the Assignment:

   • For certain types of IP (e.g., patents, trademarks), the assignment may need to be recorded with the relevant government agency (e.g., the U.S. Patent and Trademark Office) to be legally effective.

Difference Between an Assignment of License and a License Transfer:

• Assignment of License: The full rights and obligations of the license are transferred to a new party, effectively replacing the original license holder.
• License Transfer: May refer to the process of moving the license to a new party with the consent of the licensor but does not necessarily involve the full assignment of all rights and obligations.

Difference Between an Assignment of License and a Sub-License:

• Assignment of License: Transfers the entire license, including all rights and obligations, to a new party.
• Sub-License: The licensee grants a third party the right to use the licensed IP, but the original licensee retains its rights and obligations under the original licensing agreement.