Invention licence agreement

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Document overview

This is agreement gives a licensee rights to use intellectual property in return for payment upfront to the inventor and/or an ongoing royalty fee. The product may be suitable for end-use as is, or it could be a component within another product.
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  • Length:21 pages (6400 words)
  • Available in:
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About this document

This comprehensive agreement has been written for use by the owner of an invention or technology who wishes to license it to a manufacturer or end-user.

The invention itself and the permitted use should be specified in the document, although exactly what these are is not important to the suitability of use of this agreement.

The document allows the owner to restrict the licence to use in a particular industry or geographic region so that additional licences can be sold for other areas or uses in order to commercialise the product to the fullest extent.

This agreement covers your intellectual property rights in every aspect of your work, including design drawings, copyright, software, and patents.

It provides for a single payment up front with the option of an additional recurring royalty fee. The licence lasts for ever and is therefore irrevocable - so that your licensee can be sure that it and its customers are safe in buying from him. It is limited to a particular market. There are no re-sale or sub-licence rights.

If the product or device or invention requires to some extent on a support system, whether operating software, operating manuals, help with installation or analysis of technical device feedback, there are multiple options within the document as to how this might be provided that give separated control.

There are two reasons why you might wish to protect this additional material more strongly:

  • the support system may have far wider application than the invention and you might want to be able to use it in the same market for other applications, or in other products and other markets

  • you may not own all the supporting material and therefore might not have the rights yourself to grant it under the same terms. You may be able to sub-license it, but subject to tighter restrictions.

Although this is a long document template of over 6,000 words, it has a modular structure and is written in plain English. That makes editing easy because you can choose whether each paragraph is suitable and simply delete those that are not. The uncomplicated structure also ensures that the licensee understands the terms, especially if English is not a first language.


This agreement provides a complete legal framework for what may appear to be a complicated deal. It covers:

  • Definitions and interpretation
  • Warranties and understandings
  • The licence deal
  • Licence of supporting IP
  • Use of third party IP
  • Protection of licensed material
  • Royalty calculation
  • Third party infringement
  • Continuing research, improvement and product updates
  • New intellectual property and derived products
  • Confidentiality
  • Indemnities
  • Other matters relating to enforcement and other legal issues

Also included are over 2,700 words of drafting notes that tell you the purpose of each paragraph and what choices you might make.

Sample invention licence agreementSample page from the invention licence agreement

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