ip licence

When To Use An

IP Licence Agreement

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Posted by Minna Boyle on 6 November 2018

What is an IP Licence?

Intellectual property, or “IP”, refers to the various rights available under the law for intangible property – this can be things like brand names, logos, original content and software code. In almost every kind of business, intellectual property is one of the most valuable aspects of the business and should be properly protected!

An IP Licence Agreement is a legally binding contract that allows you to monetise your IP while retaining ownership – it allows other people to use your IP on terms and conditions you set. An IP Licence Agreement should set out key terms such as the payment terms, licence scope, termination rights and liability protections.

Why Do I Need It?

Anytime you are going to allow someone else to use your IP, you need an IP Licence Agreement. Similarly, if you want to use someone else’s IP for your business, an IP Licence Agreement from the owner will allow you to use their IP. It is especially useful when the parties want to set the rules on how the IP can be used.

How Do I Do It?

You should get your IP Licence Agreement drafted or reviewed by a lawyer. Often, an IP Licence will form part of another contract you have with a customer, such as a Service Agreement or Development Agreement.

IP Licence Agreement Example

Morgan has written some software code that can be integrated with all sorts of apps to prompt notifications. Three different app companies want to use this software in their apps, which means that she needs a non-exclusive licence drafted. 

Morgan has a lawyer draft an IP Licence Agreement that can be used non-exclusively with all 3 companies so that they pay her to use the code, but Morgan retains ownership and has the right to licence the IP to any other app companies that want to use it.

What’s In An IP Licence?

An IP Licence should cover the following parameters:

  • TERRITORY – Where will the agreement apply? E.g. worldwide, Australia-wide,
    just in a particular state?
  • EXCLUSIVITY – Will other people be able to licence the same IP?
  • TERM – How long will the licence last for? E.g. 1 year, 3 years, forever?
  • REVOCABILITY – Can the licence be revoked and if so what are the implications?
  • TRANSFERABILITY/ SUB-LICENCES – Can the licence be transferred or sub-licenced to another person or company?
  • PAYMENTS/ ROYALTIES – Would payment be made yearly, by percentage of sales, or other?
  • PURPOSE – Are there any restrictions on what the IP can be used for?

Need Help With An IP Licence?

Writing an IP Licence Agreement can be complex and daunting, as it’s hard to know what to include and how to word it. It’s a good idea to invest in a lawyer to assist you with this process, as it’s a one-off cost that can save you from disputes and liability in the long run – and ensure you get a good deal.

At Sprintlaw, we have a team of experienced lawyers can assist you with drafting or reviewing your IP Licence Agreement. Get in contact with one of our consultants for a no-obligation chat on how we can help you sort out your IP Licence Agreement and help with any other legal issues your business may have.

Need help with an IP Licence?

We can help! Just get in touch and we can walk you through your options.

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Minna Boyle

Minna is the legal operations manager at Sprintlaw. After receiving a law degree from Macquarie University and working at a top tier law firm, Minna now manages the legal operations at Sprintlaw and puts a focus on making legal knowledge more accessible to the public.
Minna Boyle

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