Licensing agreements provide a way for you to allow others to use your property, including software and intellectual property (IP), for a fee, whilst you retain ownership of the property. Much the same way as a landlord allows a tenant to use the landlord's house for a fee (rent).
Licensing Agreement Lawyers NSW
Most commonly, we see our clients using a licensing agreement to protect ownership of their IP whilst commercialising their idea/concept. For example, if you designed a new car jack and you wanted to have the jack manufactured and distributed, you would typically identify a suitable manufacturer/distributor and enter into a licence agreement with the manufacturer/distributor. This agreement would provide the manufacturer/distributor with sufficient financial incentive to manufacture/distribute the jack, and a licence to use your IP (‘rights’) for the limited purposes of manufacturing and distributing the jack. In consideration of providing the licence, the manufacturer/distributor would pay you a royalty… e.g, an amount per jack sold.
In relation to IP, licensing agreements are what allow the owners of IP to control, manage and protect their IP, and to profit from their IP.
Your licensing agreement should be tailored to meet your needs in relation to your property… your needs in relation to your agreement with your manufacturer… and your needs in relation to your agreement with your distributor.
Every single licensing agreement should have proper regard for the type/scope of IP and the associated rights that are being granted to the licensee.
A licensing agreement for a piece of software would differ greatly from one associated with music. There are also many different types of licensing agreements, i.e. one-off licenses, country-based, territory-based, associated with a specific business type, exclusive, and so on. Licenses can also be based on patents, copyright, trademarks, registered designs and trade secrets.
If you would like to discuss your requirements for a licensing agreement, get in touch with our Business Team today.
What is included in a standard Licensing Agreement?
Typically, a license agreement would cover off on the following:
- Outline of the IP – What is the IP being licensed?
- Scope of the License – How is the IP being licensed?
- Exclusivity & Territory Clauses – Where is the IP being licensed?
- Term / Duration Clauses – How long can the IP be licensed for?
- Prohibited Uses / Limitations – How can the IP not be used?
- Renewal Terms – Can the IP be licensed again?
- Payments / Royalties / Milestones / Fees – How does the IP make money, and how much?
- Transfer & Sublicense Rights – Can the IP license be transferred or sublicensed, and how?
- Support Services / Training Procedures / Testing – Does the licensor provide any of these to the licensee, with respect to usage of the IP?
- Legal Clauses – Other standard legal clauses that are typically found in any contractual document, i.e. limitations, indemnities, GST, rights to termination, etc.
Is there a standard licensing agreement template I can use?
Yes. Do we recommend using one? No.
Standard licensing agreement “templates” can be found online via a quick search on Google. However, these basic templates are written with generic terms and conditions that are unclear, generalised and ambiguous. If you use one of these templates you run the risk of the agreement being unenforceable.
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