Sportslaw Jargon: Licensing

Licensing is a copyright or trademark owner's grant of permission to use a copyrighted work or trademarked name and design in a way that would otherwise be considered infringement. The license, usually created by an agreement between the copyright or trademark holder (licensor) and the person wishes to use the material (the licensee) mandates the scope of the use of the material. Implicit in every license is a promise by the licensor to refrain from suing the licensee beyond what is in the agreement. Any inconsistent use is considered an infringement, and financial penalties and injunctive relief may result.

The terms of a license agreement are very specific. Often, they involve geographical location, export prohibitions, royalty rate percentages and liability insurance provisions. Licensing offers the copyright owner financial profit while protecting the integrity of the product. To compare, a sale is an outright transfer of the copyright ownership. A license is for a limited right to use.

In sports, license agreements are often made regarding the use of team logos, whereby firms contract to produce apparel with the team logo (name, design, colors) in exchange for a specified royalty (which is paid to the merchandising arms of the various professional sports leagues). Also, game films can be licensed for reproduction in the same manner.