Your Intellectual Property Licence Agreement sets out the terms and conditions on which a licensor (the party who owns the intellectual property) will licence intellectual property to a licensee (the party using the intellectual property).

Your grant of licence clause should set out the type of licence you will be licensing and address whether the licence is exclusive or non-exclusive, perpetual or limited to a particular term, revocable or irrevocable, assignable or non-assignable, Australia wide, worldwide or limited to a particular territory and for what purpose the licensed intellectual property can be used.

Exclusive or Non-Exclusive

If the licence is exclusive, it means that the licensee is the only person that is being licensed the intellectual property, which could also be limited to a particular area in terms of exclusivity. For example, you may be the only person being licensed the material in NSW. Non-exclusive means that other businesses or people may also have the same intellectual property licensed to them.

Perpetual or limited to a particular term

If the licence is perpetual, then the licence will continue until it is terminated in accordance with the agreement. If it is limited by a particular term, then it will be terminated at the end of the term or in accordance with the agreement, whichever is earlier.

Revocable or irrevocable

If the licence is revocable, then it may be terminated and revoked by the licensor. If the license is irrevocable, then the licensor cannot revoke the licence but may be able to terminate the licence if the licensee fails to act in accordance with the agreement or breaches the material terms of the Intellectual Property Licence Agreement. If the licence is for a particular term, then it will terminate at the end of the term whether or not it is revocable.

Non-assignable or assignable

This will define whether or not the licensee is able to assign the licence to others. Usually the Intellectual Property Licence Agreement will also address whether you can sub-license the licence to others.

Australia wide, worldwide or in a particular territory

This will set out where the licence can be used, for example, only in NSW, only in Sydney or a defined area on a map as agreed by the licensee and the licensor during negotiations. It may also reflect where the licensor has the rights to that licence, for example, only within Australia.

If, as a licensor, you are licensing the intellectual property rather than assigning, this clause should set out that the agreement and the licensee’s use of the intellectual property under the agreement will not assign any rights in the intellectual property, whether registered (for example a trademark or patent) or unregistered (copyrighted material). This clause not only states the type of licence but makes clear that you are not assigning any intellectual property to the licensee. If you would like to assign the intellectual property, then you should draft an assignment of intellectual property, as this involves the sale or transfer of intellectual property rather than licensing.

Conclusion

If you’re unsure how to go about drafting your Intellectual Property Licence Agreement you should speak with a qualified, experienced business lawyer, preferably one with experience drafting Intellectual Property Licence Agreements. At LegalVision, we draft Intellectual Property Licence Agreements on a regular basis, so if you’re in need of legal advice, contact us on 1300 544 755 and speak with one of our business solicitors.

Edith Moss

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