IP rights sale agreement: in chemical compound

This is an agreement for the restricted sale of rights in a chemical compound. The purpose of the product could be any, and the right to use it could also be limited by any means, whether geography, industry or end use. The document allows for one-off and royalty payments, and also for ongoing co-operation in further development of the product.
Suitable for use in: England & Wales and Scotland
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About this document

This agreement records the sale of rights to use a pharmaceutical or chemical innovation – either a stand-alone product that will be sold directly under a brand, or one that is used in the production of some other product.

The product may be used for a single purpose, or have many applications in different industries. You can restrict the rights that the seller acquires in any way that maximises the value of the sale, whether that might be based on geographical usage, specific applications, time or something else.

For example, you might have developed a compound that you wish to use yourself in the manufacture of your goods, but there may be other applications in markets that you don’t sell into. Using this agreement, you might sell the rights to use it for a set period of time to a similar business in another part of the world.

The product might have an industrial usage, such as being a lubricant or a paint pigment, or it might have a bio-tech or pharmaceutical application.

The document allows for an initial payment to be made, with on-going royalties based on use. Either can be changed if not applicable. The licence terms are extensive so that you have a suitable, wide choice of options in this important area.

Although the licence terms clearly separate the interests of the parties, arrangements of this nature often require considerable ongoing co-operation relating to the subject matter. This agreement does not provide for the same type of support as would a software product, but it does provide for co-operation and help, paid or free. Because this co-operation may be essential, in this agreement neither party is favoured. We have included reasonable protection for both sides.

The agreement terminates on expiry of supporting patents or when generic versions available or as you wish.


The subjects most likely to be important to you, and which this agreement covers are:

  • Definitions and interpretation
  • Warranties and understandings
  • The licence deal, restrictions and clarifications
  • Royalty calculations and payment terms
  • Ongoing co-operation
  • Third party infringement
  • Confidentiality
  • Disclaimer
  • Indemnity by the inventor or creator
  • Indemnity by the developer or buyer
  • Protection of owner's title and rights
  • Termination if the buyer fails to succeed
  • Other matters relating to enforcement and other legal issues

Additionally we include over 2,200 words of drafting notes to help you edit this document precisely for your requirements.


This document was written by a solicitor for Net Lawman. It complies with current English law.

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