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Negotiating and drawing up a licensing agreement is a complex process. Failure accurately and comprehensively to address all of the necessary elements may result in costly and time-consuming disputes in the future. In order to properly draft and negotiate license agreements, it is important to understand the nature of the intellectual property rights being licensed. Different intellectual property rights will require different language in the grant of the license agreement. This is particularly true when multimedia products, which may incorporate several different types of intellectual property rights, are being licensed. The nature of the intellectual property right being licensed may also affect other provisions of the agreement, such as the length of term of the agreement.

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