In Short
- IP licences allow you to commercialise your intellectual property while retaining ownership.
- There are three main types of licences: exclusive, non-exclusive, and sole, each offering different levels of control.
- Ensure you choose the licence type that aligns with your business goals and draft a clear agreement.
Tips for Businesses
When licensing your IP, carefully assess how much control you want over its use and how many licences you wish to grant. Ensure your IP is protected in all relevant regions and draft a thorough agreement to avoid disputes. Tailor your licence type to your business strategy and market needs.
Businesses often develop a broad range of intellectual property (IP) for their use, which can sometimes then receive protection through registration. If you have developed IP for your business, you may now want to commercialise your IP. This article will discuss the best methods to commercialise your IP through an IP licence.
Benefits of an IP Licence
As IP rights are intangible assets for your business, commercialising your IP can provide additional benefits for your business. Before you consider commercialisation, your IP must be appropriately registered and protected through IP Australia. Forms of IP that can be registered include:
- patents;
- trade marks;
- designs; and
- plant breeders rights.
Once you confirm your ownership of your IP, you can then consider commercialisation. An IP licence is a contract that provides someone with the right to use an IP that they do not own. In contrast, you could also assign or sell your IP rights to another party, which means you will no longer own or be able to use your IP. The benefit of a licence is that you will maintain ownership over the IP. Rather than assigning the IP, where you lose all rights to it.
IP licences are a valuable tool for entering new markets or expanding your business. By licensing to trusted partners in different regions, you can leverage their market expertise and distribution networks without needing a direct presence. This makes licensing a cost-effective way to scale and enter foreign markets. However, ensure your IP is protected in the relevant jurisdictions to avoid disputes. Conducting due diligence and securing international IP protections is crucial for safeguarding your rights during the process.

This guide explains the essentials of trade marks and the steps required to register a trade mark.
Types of Licences
Having decided on an IP licence as your method of commercialisation, you now need to consider which type of licence is best for your business. As the owner of the IP, you are the licensor and can license your IP to someone else for some form of payment. You still maintain ownership over the IP. Maintaining ownership lets you dictate how the licensee may or may not use the IP. There are three key types of licences.
1. Exclusive Licence
An exclusive licence, as the name suggests, is a licence that allows the licensee exclusively to both use and commercialise your IP. This exclusivity also excludes you, the licensor, from using the IP. However, this high exclusivity means that the monetary payment is usually much higher than other licences, making this a profitable type of licence.
Commonly, licensors will include specific restrictions on the licensee’s use of the IP in relation to certain:
- products;
- geographical areas; or
- fields.
These restrictions allow you to retain IP rights in the restricted areas, allowing you to continue to exploit your own IP.
2. Non-Exclusive Licence
A non-exclusive licence allows you to license the IP to multiple different parties.
The benefit of this licence is that you can continue to use your IP without as many limitations. In addition, this non-exclusive licence may allow for greater IP commercialisation and monetary payments. You can still dictate certain restrictions on the IP use by a range of licensees.
3. Sole Licence
A sole licence is a combination of both an exclusive and non-exclusive licence. It allows a licensee to use the IP, but you can still use your IP. This allows you to have more control over your IP and continue using it with the licensee, unlike an exclusive licence.
Regardless of the type of licence you choose for your business, you will need to outline this chosen relationship in a licence agreement between yourself and the licensee.
Continue reading this article below the formIP Licence Considerations
When selecting an IP licence, you should consider the purpose behind your wanting to license your IP. You should also determine how much control you want over the IP and the licensee’s use. If you cannot develop further and commercialise your IP yourself, or if you are looking for minimal involvement, then you may wish to pursue an exclusive licence.
Many potential licensees may be reluctant to agree to a non-exclusive licence, as the value of an exclusive licence is much greater. It is important to consider whether you can grant one single licence for a higher fee or grant many licenses for a smaller fee. Additional administrative efforts are also involved in managing either option. If you are looking to continue to use your own IP, or still retain more control over your IP, you may consider a non-exclusive or sole license.
Regardless of which licence you ultimately choose, you will need to have appropriate licence agreements prepared to govern the relationship. You will need to understand this agreement and your rights, especially if a licensee breaches the agreement. These agreements will often outline core details such as the:
- way you and the licensee are permitted to use the IP;
- length of time that the licence is valid for; and
- fees you will charge for the licence.
You need to ensure your agreement captures all your considerations and concerns. It should also explicitly outline the type of licence you are granting.
Key Takeaways
If you want to license your IP, the first and most critical step is to ensure that your IP is protected. When commercialising your IP, you need to consider how this may affect your business and your ability to use your IP.
If you wish to learn more about which IP licence is right for your business, our experienced IP lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
An IP licence lets the owner (licensor) grant someone else (licensee) the right to use their intellectual property while keeping ownership. As the licensor, you retain control and ownership, even when someone else uses it for a set period or under specific conditions. In contrast, an IP assignment permanently transfers ownership, meaning you lose all rights and control over its use.
When licensing IP internationally, thoroughly research the laws and regulations of the target country. Ensure your IP is registered there to prevent infringement or unauthorised use. Draft clear, detailed licence agreements that address international laws, dispute resolution, and territorial limits. Collaborating with local legal experts can help protect your rights fully.
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