When drafting your Intellectual Property Licence Agreements, you should include a thorough fees clause which ensures that, as a licensor (the party who owns the intellectual property), you receive payment. As a licensee (the party using the intellectual property), you should understand your obligations and how any price changes may affect you. The fees clause of your Intellectual Property Licence Agreement should address the fees or royalties payable, when they fall due, what payment options are accepted, any price increases, any interest on late payment and whether the licensor can amend their pricing structure.

When drafting your Intellectual Property Licence Agreement you should clearly state the fees that are due and if there are any upfront fees payable. As well as outline the types of fees payable. For example, is a royalty payable or is a monthly fee due? Do the fees relate to the particular use of the intellectual property?

Payment Options

As the licensor, you should set out the format in which payment will be accepted, for example, direct debit, credit card or Paypal, and whether you will invoice the licensee, or if there are any invoice terms that the licensee is required to meet. As a licensee, you should ensure you understand the fees payable and whether you can afford the fees that are being charged. If you are agreeing to a long term licence, then you should consider whether you will be able to afford the fees over this period. The typical period for a licence is 3-5 years and can sometimes include an option to renew the licence.

Charging Interest

As a licensor, you may wish to charge interest on any amounts which are unpaid after the expiry of a certain period of days following the payment date. You should also set out what happens if invoices are unpaid after the due date, and that you have the right to engage debt collection services for the collection of unpaid debt, as well as the right to commence legal proceedings for any outstanding amounts owed to you. As a licensee, you should check what the ramifications are for non-payment or late payment of the fees.

As a licensor you should make sure you include a clause which states that the pricing structure or payment methods may be amended from time to time in your discretion. If your licence term is over a long period of time, you should consider including an increase every year to reflect changes in CPI.

Making and Receiving Payment

If you are a licensor making sure you receive payment on time, in the form that you approve, and for the appropriate amount is essential for any Intellectual Property Licence Agreement. If you are a licensee you should make sure you understand your obligations in relation to payments and any ramification for non-payment which could include your licence being terminated.


Having a thorough and detailed Intellectual Property Licence Agreement can reduce issues between the parties later on. We can also assist you with a variety of other intellectual property issues including trademark and patent registration. So if you’re in need of legal advice, contact LegalVision on 1300 544 755 and speak with one of our experienced online solicitors today.

Edith Moss
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