A Guide to Our Intellectual Property Licence

by Kate Mccormick - Solicitor

Our guide to our intellectual property licence document will provide you with step by step instructions on how to fill out our downloadable template and will also tell you everything you will need to have to do so.

A Guide to Our Intellectual Property Licence

This Intellectual Property Licence is for use by an individual or business to grant rights to use intellectual property owned by them to a third party. This Licence Agreement does not transfer ownership in the intellectual property rights but simply sets out the terms that have been agreed for their use. The Licence can be used to licence use of Unregistered and Registered Trademarks, Copyright, Patents, Registered and Unregistered Design Rights and Know How.

Clauses in this Intellectual Property Licence

Cover page - you will need to insert the names of party 1 (the Licensor) and party 2 (the Licensee).

Between – this clause defines whom the Licence is granted by and to. You need to insert the details of both parties to the Licence here including their business/company name and registered number (if either party is a registered company) and registered office or trading address.

Background - this clause gives background information to set the scene for the grant of the Licence. If there is a sale and purchase agreement in place you should insert the date that this was signed here. If not, you should delete this element.

Licence - this clause explains what the document is and does. If you wish to create an exclusive Licence to the Licensee only, you can amend clause 1.1 to state this. An exclusive Licence means that you will not be granting similar rights over the same Intellectual Property to someone else. You should insert the annual Licence fee to be paid by the Licensee in clause 1.2. You can also add further details as to how the payment should be made, if you wish.

Quality Control – this clause sets out obligations that the Licensor must comply with when using the rights licensed to them. You can add to these requirements or amend them so that the details fit the nature of your business.

Licence Recordal - this clause obliges the Licensor to provide reasonable assistance to the Licensee where necessary to register the Licence.
This clause also excludes section 30 of the Trade Marks Act 1994 which gives the Licensee the right to insist on the Licensor bringing an infringement action against anyone infringing any trade mark(s) covered by the License or to bring such proceedings in its own name if the Licensor does not do so.

Maintenance - this clause obliges the Licensee to provide reasonable assistance to the Licensor where necessary in keeping the Licensor’s Intellectual Property registrations in force.

Indemnity – this clause obliges the Licensee to pay to the Licensor any sums incurred by the Licensor as a result of the Licensee’s use of the licensed Intellectual Property, apart from any liability for defective stock that is ready for sale at the date of the Agreement. This is included because the Licensor could be liable for an offence if its Intellectual Property is used on defective products sold by the Licensee, under the Consumer Protection Act of 1987.

Infringement – this clause provides a mechanism for ensuring that any third party infringements are dealt with. The Licensee must notify the Licensor immediately of any suspected infringement and provide the Licensor with all available information so that the Licensor can take any appropriate action.
This clause also makes it clear that the Licensor is not to be liable to the Licensee for any infringement action brought by a third party in respect of the licensed Intellectual Property.

Term and Termination – you will need to insert the length of time that the Licence is to last for, in Clause 7.1. This will be a fixed period from the date of the Licence unless it is ended earlier by the Licensor for one of the reasons in clause 7.2.
The Agreement as drafted does not provide for the Licensee to be able to end the License early if the Licensor is in breach of the Agreement but you can amend the clause to add such a right if it has been negotiated between the parties.

Miscellaneous – If the Licensor or the Licensee are based abroad, you may wish to change the jurisdiction clause to reflect this.

Schedule 1 – is it very important that you insert the details of the Intellectual Property rights to be covered by the Licence in this Schedule. You should include any registration number(s) in the details. You also need to provide details of the Goods which the Intellectual Property may be attached to and the Territory which the Licence is to cover. This will record whether you are granting the rights in relation to use of the Intellectual Property solely in the UK, world-wide or in a combination of countries and continents.

Signature clauses – this clause makes the Licence enforceable. You need to insert the names of both parties and the officers signing on their behalf. Both parties need to sign the Licence here. Once both parties have signed the Licence it should be dated on the Cover Page and also at the top of Page 1. This is the date that the Licence will commence. The Licence may then need to be registered depending on the type(s) of Intellectual Property that it covers. Both parties should keep a copy of the signed Licence.