If you allow someone to use your materials, do you have to execute an agreement in writing or is it enough to agree orally?

The U.S. law provides that oral agreements have the same force and effect as written ones and are enforceable in courts in case of a dispute. The parties can shake hands and create an agreement. Having said that it is highly advisable to have a well-constructed written agreement. When we talk about IP use, there are many questions that are difficult to predicts and therefore discuss orally. For example, an IP owner can license his IP to someone by saying “You can use it”. He can even indicate the time period, the scope of the use and assignment restrictions. That’s enough for a legally binding contract. If later the IP owner does not like the manner his IP is used or simply decides to revoke the license, but the authorized user contests it, a wide field of legal issues will open. Many matters would be questioned. For example, whether there were any restrictions about geographical use? time-period? were the parties on the same page regarding the scope of use? was the use authorized for commercial or only for non-commercial purposes? did the IP owner expect to receive some compensation if the use of his IP brings profits? who is responsible if a third party raises infringement claims – the owner or the user? if derivatives are created, who owns those derivatives? was the user authorized to create and distribute the copies of the IP or was it only for his own exclusive use? and many more depending on the product at issue. The more comprehensive the agreement is the less possibility exists that the parties will end up in court or otherwise suffer damages. 

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.