Hilary Weaver.
Long-term trademark licensing agreements are inherently risky transactions for licensees. Consider the risks facing a hypothetical business owner who licenses rights in the trademark of an up-and-coming business under a long-term, exclusive licensing agreement. If the licensed trademark loses popularity over time, the license’s value could plummet and cause the licensee to suffer a financial loss. On the other hand, if the licensor’s brand becomes exponentially more popular, market demand for products under the licensed mark could increase and generate large profits for the licensee. Under the latter scenario, securing long-term rights under the licensing agreement could even empower the licensee to feel comfortable hiring additional employees, leasing a larger manufacturing space, or making other long-term investments in reliance upon the continued use of the mark.