Licensing agreements in Brazil are legal contracts between a licensor and a licensee. The licensor is the party that is granting the right to the use of its product, and the licensee is the party that will be using it. In most cases of a licensing agreement, the licensee is not simply granted the use of a product on their own terms. The agreement usually states conditions of use, and often the licensee will pay royalties for every sale, because the product is not ultimately his or her own.
If you are looking to set up a business in Brazil that sells products or licenses them out to other retailers, it is very important that you understand the laws that surround licensing agreements in the country. In fact, you should find a Brazilian attorney to help you with the following procedures as they pertain to the law of Brazil:
- Patent Trademark Design – When it comes to licensing out your company’s logo or trademark, it is important that the licensee does not alter it in any way on their product. Additionally, it is important that they don’t make your logo too small to be seen.
- Research and Development Costs – In some cases, a licensee who knows he or she will be signing a licensing agreement with a licensor can contribute to the costs associated with researching and developing the product they’ll sell.
- Technical Assistance agreements – If your sales and marketing departments are in Brazil while your research development team works in the US, you might want to consider a TAA. This is a special type of licensing agreement that is not for physical products, but instead for technology that can be sent digitally.
- Software Development Agreements – This type of agreement is between a company and a software developer. The contract basically states that the company will pay the developer to create customized software for them.
All of these agreements are different types you should make sure your Brazilian attorney is aware of before signing an official licensing agreement. In addition to these different types of agreements, you’ll need to outline the following when drawing up your own formal licensing agreement:
- Territorial restrictions
- Financial advances
- Royalty fees and calculations
- Guarantees on sales
- To-market time schedules
If you are drawing up your own licensing agreement in Brazil without the help of a knowledgeable attorney, you might accidentally leave some very important qualifications out, which could severely hurt your business. For example, if in your licensing agreement you forget to specify the length of the contract, your licensee might legally be allowed to keep taking inventory from you after you want them to stop. Similarly, they might hurt the reputation of your brand if they consistently avoid doing thorough quality checks before putting your product on the market.
Before drawing up a licensing agreement for your business in Brazil or signing one, consider contacting one Brazilian licensing agreement attorney to get it right the first time.