Post default

Business Law And Its Impact On The Distribution Of Commercial Licensing

By Lawfarm Team January 16, 2022

By Devanshi Shukla


In the current day and age, new businesses are emerging day in and day out. People are taking risks and exploring new fields. These businesses involve an amalgamation of multiple transactions. Business law helps in ensuring that these transactions are carried out properly to avoid legal consequences. As businesses form a large portion of our daily lives and economy, business law provides for rules and regulations for efficiently conducting business. These laws help in protecting the interests of the owner, consumer and any other person involved in the business. 

Business law can also be termed mercantile or commercial law. It forms a part of both public and private law. In India, statutes that regulate business include the Indian Contract Act 1872, Sale of Goods Act 1930, Competition Act 2002, Companies Act 1955, et cetera.

Licensing And Types Of Licensing Agreements

Licensing can be understood as an arrangement where one business entity allows another business entity to make its product for some form of payment. It helps you in expanding your current manufacturing, production and marketing power. Remuneration is received by a company for licensing its product or services registered under IPR Law. The different types of licensing agreements are:

  1. Patent Licensing

A patent is a right given for a novel invention that provides a new way of doing some task. It prevents others from exploiting the invention without the permission of the owner of the right. The patent owners give licenses to others for using their innovation and in return receive remuneration. 

  1. Trademark Licensing

Trademarks help by protecting the logos, tag lines or names of businesses. This sort of licensing agreement allows other businesses to use the trademarked aspect. 

  1. Copyright Licensing

Copyright gives protection to literary and artistic works. Copyright licensing works similar to trademark licensing.

  1. Trade Secret Licensing

Trade secrets like the formula or recipe of an article are protected by secrecy. Such forms of licensing acts have a non-disclosure aspect whereby the other party cannot share the secret with any other party.

Impact Of Business Law On Licensing

Business laws have a lot of impact on commercial licensing. These impacts include:

  1. Licensing reduces the chances of fraud significantly. Instances of illegal usage of intellectual property get lowered due to the stringent regulations placed by business law. If the intellectual property rights owner is not provided with remuneration, he/she can sue the other party for damages and render the licensing agreement void. 

  2. Licensing provides a larger market space for the product. The product is made available to a large consumer base and the licensor receives more profit. 

  3. Business laws help in protecting the originality and innovation attached to a product. 

  4. The brand value of the product helps attract foreign investment. This investment from foreign companies helps boost the economy of the country. The implementation of compulsory licensing has expressly embraced international law, making it one of the most substantial limitations in rights, with a large latent influence on both domestic and foreign investment activities.


As a result, commercial or business law has a significant influence on the industrial sector. Its increasing utility in diverse subject issues relevant to various sectors of commercial law aids in the progress of commercial law. Businesses, being one of the most extensive platforms available to the general public, must be updated regularly. Because the various provisions supplied in all of the elements included in mercantile law function concurrently with varied advantages. Its efficacy is immediately seen while administering various commercial tasks, and it finally leads to the improvement of the enterprise. As a result of its crucial function, it provides and protects the rights of many people in the business sector.

Tags: Business law , commercial licensing , intellectual property rights , commercial law

Default avatar
Licensed for years

Comments 0

Please Login or Register to Submit Comment

You may also want to read

Post default

Sports lawyer india ,   gamechanger ,   tmt law firm ,   law students ,   day zero ,   australia sports management

As young budding lawyers, generally when asked about sports law, we have no clue about it. What is sports law? Is there any special Act dedicated to this field of law? If not, then which Acts are usually referred? Most of us would be as perplexed and confused as a non-law student would be.


By Dipti Srivastava July 26, 2016
Post default

port ,   importer ,   business ,   clothes merchant ,   businessmen ,   World Trade Organisation ,   WTO ,   General Agreement on Tariffs and Trade ,   GATT ,   General Agreement on Trade in Services ,   GATS ,   Agreement on Trade Related Aspects of Intellectual Property Rights ,   TRIPS

By Ashwini Tallur, National Law University Jodhpur


We all realize the importance of trade and commerce and most of us are aware of the World Trade Organisation (WTO), the only global international organization dealing with the rules of trade between nations[1], formed in 1995. The WTO...

By Ashwini Tallur July 27, 2016
Post default

Central Consumer Protection Council ,   celebrity liability ,   nestle case ,   FSSAI ,   Amitabh Bachchan and pepsi ,   endorsement of products ,   celebrity endorsement ,   Vibha Bhargava Commission ,   Section 24 of the Food Safety and Standards Act ,   2006 ,   maggi case ,   madhuri dixit and maggi

Do celebrities owe us a duty for the claims they make in advertisements?

The favorite midnight snack of many, Nestlé’s Maggi has been banned by the Food Safety and Standards Authority of India (FSSAI) because of problems associated with the quality and labeling of the product. The notices issued...

By Ayushi Singhal July 27, 2016