Basics of Intellectual Property Licensing


A License Agreement is a relationship of co-operation between parties whereby one party, the licensor, the possessor of IP assets Permits the licensee to use his intellectual assets in return for a specific compensation. A license agreement should reflect the goal of both the parties’ involved and should be structured in such a way that ensures effective utilization of the IP.

Examples of IP License agreement include the following:

  1. Copyright License Agreement
  2. Patent License Agreement
  3. Trademark License Agreement
  4. Merchandising Agreement
  5. Transfer of Know-how etc.

Scope of a License agreement:

A license is a legal tool by which an IP owner can transfer the IP rights to any person seeking the rights to work the IP assets at any time before the expiry of the same. By granting a license to a person, the IP owner authorizes the person (licensee) to exercise the IP rights under certain circumstances. IP licensing plays a vital role in technology commercialization.

Scope of an Agreement defines the permissible limits of using the rights that are granted. Before entering into a licensing agreement, it is essential to understand the scope of license agreement. It is always advisable to limit the scope of the agreement by keeping it as narrow as possible to avoid unwarranted use of the rights granted.

Based on the Rights being granted, license may be divided into:

  • Exclusive license: Exclusive license excludes the use of the IP licensed to everyone but the licensee. By virtue of an exclusive license, even the licensor is excluded from continuing to use the intellectual property.
  • Sole License: Prevents the licensor from licensing the intellectual property to anyone else except the licensee. However, the licensor retains the right to use the intellectual property.
  • Non-exclusive License: A non-exclusive license can be granted as often as desired. The licensor can license the intellectual property to more than one licensee.

by Aruna Mukundd

Photo by opensourceway / CC BY