License rights to use IP using these documents
These agreements allow you to grant use of your intellectual property to someone else whilst retaining ownership in the long term. Licensing agreements can help businesses generate revenue from their intellectual property without having to sell or produce the goods themselves.
Intellectual property encompasses many types of created work, from images and designs to processes and systems. IP can even be a combination of other works.
However, the majority of deals in IP require similar provisions. So a licence of rights in a set of magazine articles is not dissimilar from a licence of design rights for manufacture. For that reason, our documents can be used for a very wide range of alternative deals and arrangements.
It follows that when you look for a document, look for a description that is similar to, or matches your deal, not just a title that references the same type of IP that you wish to license. Successful licensing often involves negotiation to tailor the agreement to the specific needs and interests of both parties.
To illustrate the flexibility of licensing agreements, here are some examples of different types of licensing arrangements used in industries such as entertainment, food, and software.
Who should use these documents?
These documents can be used by either the owner of the IP (most likely the creator) or the licensee. Companies in various industries frequently use these documents to manage their intellectual property.
Most contracts are written to favour the interests of one party over the other. However, most of these documents are written so as to be fair to both sides (even if one side is favoured). The reason is that any arrangement that is intended to be continuous for any period of time requires mutual co-operation. Well-written licensing agreements can reduce the likelihood of disputes by clearly outlining the terms of use. Clear rules within the agreement template help ensure legal compliance and set expectations for both parties.
Our guidance notes explain each paragraph so that you don’t need prior experience of licensing intellectual property to edit one of our documents.
What is an intellectual property agreement?
An intellectual property agreement is a written contract that governs how IP rights are shared, licensed, or transferred between parties. These agreements cover various IP types including patents, copyright, trademarks, and trade secrets. Intellectual property rights include copyrights, trademarks, patents, and trade secrets, and the agreement should specify the scope of these rights. The document establishes who owns what rights, how the IP can be used, and what consideration (usually payment) is involved. Whether it’s software licensing, image usage rights, or technology transfer, these agreements protect both the licensor and licensee by clearly defining permissions, restrictions, and liability limitations. Assignment agreements transfer ownership entirely, whilst licence agreements grant usage rights whilst retaining ownership. Licenses can be structured to allow different levels of use and control over the intellectual property.
What are the most common license agreements?
The most common licence agreements include software licensing (covering applications and source code), copyright licensing for creative material (covering images, written content, and multimedia), patent licensing for technology and inventions, and trademark licensing for business branding. Commercial arrangements typically involve paid licences with royalty structures, whilst some copyright work uses free licensing models. Each type addresses different liability concerns and termination conditions. An exclusive license grants sole rights to the licensee, while non-exclusive arrangements allow multiple licensees. Professional templates accommodate these variations, ensuring proper assignment of rights, clear payment terms, and comprehensive provisions protecting both parties‘ interests.
Licensing agreements are used across many industries. For example, toy manufacturers often license popular characters from movies, TV shows, and franchises to produce and sell action figures and other merchandise based on well-known intellectual properties.
How to make a licensing agreement?
Creating a licensing agreement requires identifying the parties involved, defining the intellectual property being licensed, and establishing clear terms for usage. Start by specifying what rights are being granted - whether exclusive or non-exclusive - and any geographical or time limitations. Clearly define the time period during which the agreement is effective, and specify key dates such as the commencement date and expiration date to ensure all contractual milestones are clear. Include payment structures, whether upfront fees or ongoing royalties, and define each party’s obligations. Always incorporate termination clauses and dispute resolution mechanisms. Using a professionally drafted template ensures all essential legal provisions are covered whilst allowing customisation for your specific commercial arrangement.
Strong legal documents
We describe some of our documents as simple. That does not mean that the legal effect of the document is not strong, but rather that the document is uncluttered by supplementary provisions like options for support, sub licences, licence back, and so on. Sub licensing is only permitted with the prior written consent of the licensor.
Similarly, a “heavyweight” document contains many options. You are unlikely to use all of them, but they will bring to your attention ideas that you may not previously have considered. Certain options, such as granting a sub license, may require prior written consent to ensure control over the use of the IP. Of course, you can easily edit out those that you decide not to use.
Is a licence agreement legally binding?
Yes, a properly executed licence agreement is legally binding when it contains essential elements: offer, acceptance, consideration, and intention to create legal relations. The agreement must be signed by both parties with capacity to contract. Written agreements provide stronger evidence than oral ones, particularly for commercial transactions. To ensure enforceability, include clear terms, define each party’s obligations, specify payment arrangements, and incorporate proper termination provisions. All amendments, notices, and confidentiality clauses should be documented in writing to be legally valid and enforceable. Termination provisions should specify the conditions under which the agreement may be terminated, such as breach, insolvency, or upon giving notice within a defined period. UK law recognises these agreements across all jurisdictions, making them enforceable through court action if breached. Professional templates help ensure all necessary legal elements are present.
Limiting the use of the licence you grant
All our documents allow you flexibility to grant a licence to use the IP subject to conditions that you decide.
For example, you could limit use in certain countries or for certain purposes by specifying geographic limitations in the agreement.
Limiting the circumstances in which the IP can be used lets you license the same IP multiple times to different people or businesses in order to maximise the return on your work. The licensee agrees to comply with all specified conditions and limitations in the agreement.
It also might the case that your work has a component that is the intellectual property of someone else, and that you don’t have a permit to sublicense it in certain circumstances.
Agreement templates
A licensing agreement template is a valuable resource for businesses and individuals seeking to create effective licensing agreements without starting from scratch. These templates provide a solid foundation for drafting contracts that clearly define the rights and obligations of all parties involved. By using a licensing agreement template, you can ensure that essential provisions such as the identification of the parties, a detailed description of the intellectual property, the scope and limitations of the license granted, payment terms, and termination conditions are all included from the outset.
Selecting the right agreement template is crucial, as it should be tailored to the specific type of intellectual property and the unique needs of your business. A well-designed licensing agreement template not only streamlines the contract creation process but also helps reduce administrative workload, allowing you to focus on growing your business and maximizing the value of your intellectual property. By relying on a comprehensive template, you can protect your interests, minimize the risk of disputes, and ensure that your licensing agreements are both robust and enforceable.
What you will find in your document
So far as applicable, our documents cover: Licensing agreement templates often include key provisions like payment terms, licensing rights, and quality standards, which are essential for ensuring products meet required specifications. Well-structured agreements also help maximize revenues from licensed intellectual property by clearly defining financial terms and royalty arrangements.
Named people and products
In many documents we have given a fictitious name to a party or product. We do this to make it easier for you to follow what the document is about. In licensing agreements, brand names and other proprietary materials, such as copyrighted works or trademarks, are often included and referenced. Of course, you will need to edit the document to use your own comparable names or generic ones.
Complete legal framework and commercial structure
Every agreement provides a complete structure for a deal. We cannot mention every smallest point, but you can reckon that if you need it, we have thought of it. If you have special requirements we can always help further with our review service. Licensing agreement templates can help streamline the contract creation process by allowing users to fill in specific details. These documents can also be used to create a variety of licenses tailored to different business needs, such as licensing intellectual property rights, character likenesses, songs, or franchise names.
International deals
Our use of plain English and statement that English law applies will help you to create a document that holds water in any jurisdiction. The governing law of a licensing agreement needs to be specified for legal clarity. Clear agreements also help mitigate legal and financial risks in international licensing deals.
However, every country has its own laws, so we cannot guarantee what a judge in Panama or Portugal might say. However, you will always be able to terminate a Net Lawman agreement for breach of a term. Licensing agreements should include a detailed termination clause covering multiple scenarios.
Support by the owner or creator to the licensee
Many arrangements to exploit intellectual property involve a prime deal concerning specific IP and also a secondary deal for ongoing support. Where this support may include a second licence for additional IP, we provide for it. Licensing agreements often include confidentiality clauses to protect the proprietary information of the licensor. Confidential information refers to sensitive and proprietary data that must be kept secure and undisclosed, and its protection is a key aspect of licensing agreements.
There are two reasons why you might wish to protect this additional support material more strongly:
First, the supporting material may have far wider application. You might want to use it in the same market for other applications, or in other products and other markets.
The second reason is that you may not own all the supporting material. You may yourself use in the material some IP that has been licensed to you from others, and you may need to obtain permission to use certain materials. So all you can do is to sublicense under whatever conditions you can do so.
These terms can easily be edited to suit your deal, or be deleted if you do not require them.
Preserving moral rights
The right of a creator of a work to be recognised is enshrined in law. Moral rights apply to copyrighted material, ensuring that creators are properly credited for their work. Nonetheless, we do mention it in many agreements.
Entire agreement and applicable law
The entire agreement clause is a fundamental part of any licensing agreement. This clause confirms that the written contract represents the complete and final understanding between the licensor and licensee, superseding any previous discussions, negotiations, or informal agreements. By including an entire agreement clause, both parties can be confident that all terms and conditions are contained within a single document, reducing the risk of misunderstandings or disputes over what was agreed.
Equally important is the applicable law clause, which specifies the legal jurisdiction that will govern the agreement. This provision ensures that, in the event of a dispute, both parties know which country’s laws will apply to the interpretation and enforcement of the contract. Carefully reviewing and negotiating these clauses is essential to protect your business interests and to provide clarity and certainty for both parties. By addressing the entire agreement and applicable law in your licensing agreement, you can help prevent conflicts and foster a more secure and predictable business relationship.
Protecting your rights
Who must sign?
Unlike a manufacturer of physical products, a licensor of IP rights can be up against theft on a large scale. It is very easy for a single individual to steal your rights or disclose your secrets. When your deal is with a company, only that company is bound. If one of its employees steals your secrets, all you can do is rely on your copyright.
Copyright needs no registration and no rights need to be reserved. In law, you can simply prove that you are the originator and you have not given permission and you are home and dry in a court claim. But that leaves two problems:
you do not want to have to go to court
when someone beaches your copyright, your “work” is immediately spread around, making it far harder to control and to catch further thieves.
While no legal document can guarantee to prevent theft, there are three small points that will help you (all of which we include in our documents as appropriate):
word the signature point so that the person signing also takes personal responsibility
insist on a personal guarantee
have the document signed by every member of the team who will be dealing with the work
What you can do in practice of course depends on what your IP is, how easily it is stolen and whether your counter-party will agree.
Who owns copyright?
You need to be aware that the law differs in the USA from the UK and most other Western countries.
As far as we are aware, in most countries, intellectual property created by an employee is owned by the employer. A licensing agreement template is legally binding once signed. It is also crucial to address the protection of the licensor's brand in licensing agreements, ensuring that rights, control, and responsibilities are clearly defined.
However, ownership of IP created under a contract is far less clear. In the USA, they use a term “work made for hire” to describe work done by a person who is not an employee. All such work belongs to the creator. So if you contract with a US designer for artwork for your website, that work remains his and not yours. What you get is a permit to use it for ever, on your site. For example, action figures based on popular movie characters are often produced under licensing agreements that specify the rights to use the intellectual property.
In the UK, the position is unclear. It is therefore best, when you commission work from an originator, always to include the point that “the resulting work shall be the property of” you. The terms of royalty payments should be clearly defined to avoid ambiguities in the contract.
