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Four Examples > Licensing an Engine - Pg. 224

Licensing 224 · Assignment and Sublicense. Licensees often need the right to sublicense or assign rights, for example, a production company licensing the right to make, exhibit, and distribute a film needs to be able to sublicense the exhibition and distribution rights to the film's distributors. Sublicens- ing these rights should be no worry to the licensor, as long as the rights to produce the enter- tainment stay with the production entity. If the production rights can be freely assigned or sub- licensed, the quality control that a licensor exercises in selecting a producer is negated. · Audit Rights, Governing Law, Dispute Resolution. These provisions are extremely important and can vary significantly. See Chapter 6, "The Publishing Contract," for a discussion of what to ask for in a contract. Four Examples Licensing an Engine It should be noted that while a lot of energy has gone into promoting proprietary technology for third- party licenses, only a few developers are actually making any money through licensing. It is still advisable for a company to work to develop its own technology, both because it can dramatically reduce development time if several projects can use the same core technology, and because pro- prietary technology can provide a persuasive competitive advantage if it is the best within a category. For example: if you build an outstanding RPG AI, publishers will think of your company first when they need to develop an RPG project. Cast of Characters · Licensor. Engine owner.