Successful Licensing Relationship between Two Companies

In basic terms, a “license agreement is an agreement for using trademark, brand name, and patent” (Williams, 2012, p. 96). Brands make use of licensing for a number of strategic reasons. These include, but they are not limited to, the enhancement of brand awareness. One licensing agreement that has been undertaken in recent times is that by Google and Samsung. In the year 2014, the two companies signed a cross-licensing agreement, in which case both companies agreed “to cross-license a range of each other’s patents, bolstering ties between the two main powers behind the global pre-eminence of the Android operating system for smartphones” (Pfanner, 2014).

By entering into a deal of this nature, the companies essentially sought to avoid unproductive patent disputes by cooperating. In so doing, the companies can focus on more important engagements such as innovation. It is important to note that in the past, quite a number of tech companies had been enmeshed in litigation – with some, such as was the case with Samsung and Apple, accusing each other of patent infringement. By capitalizing on an already stable partnership (i.e. with regard to Android devices), the two companies would also effectively cement their presence in the tech marketplace, even as they sought insulation from patent litigation which has over time proven to be a major issue of contention between companies operating in the tech industry.

In essence, it should be noted that although the exact details of the deal were not released to the public, mobile technology was at the very center of the said deal, with the companies observing that “existing patents, as well as some that would be filed during the next 10 years” were part of the deal. This effectively means that neither firm can profess or declare individual ownership of the cross-licensed patents.

References

Pfanner, E. (2014). Google and Samsung Sign Broad Cross-Licensing Agreement. Retrieved from https://www.nytimes.com/2014/01/28/technology/google-and-samsung-sign-broad-cross-licensing-agreement.html

Williams, C. (2012). Management. Belmont, CA: Cengage Learning.