Fillable Form Licensing Agreement

What is a Licensing Agreement?

A Licensing Agreement is a document that two parties create so that the licensor can legally allow the licensee the license to use their brand, trademark, or patented technology. In essence, the Licensing Agreement Form allows the licensee to use the intellectual property of the licensor under terms and conditions they have both agreed upon.

A Licensing Agreement Template is often drafted when an individual wants to have their intellectual property advertise and commercialize their product.

When created, a Licensing Agreement means that both the licensor and the licensee can profit from the intellectual property shared. The licensee, through the selling of the brand or product, and the licensor, through the upfront fee and royalty fees.

A licensing agreement has significant advantages for both parties other than profit. These advantages are as follows:

• The licensor has access to the licensee’s influence and reach. The product can be distributed in a larger area or even on a global scale. This also means that the licensor does not have to pay for distribution anymore, making their required capital lower.
• The licensor is also able to gain the skills and expertise that can be provided by the licensee to help the brand flourish.
• The licensee benefits by having an established intellectual property in the market, immediately. This means that the licensee does not need to spend money on the research and development of a new product.

However, as excellent as a licensing agreement appears, there are still notable disadvantages that come with signing one. These disadvantages are often the root of doubt in a lot of people who are second-guessing signing a licensing agreement. These disadvantages are as follows:

• The licensor will lose complete control over their property. At the extreme, this can mean that the licensor has opened a small opportunity for the licensee to steal the intellectual property of the licensor.
• There is also the danger of both parties becoming too reliant on each other to make a profit
• The licensee also has to pay an upfront fee, as well as royalty fees. This means that their profits will always be reduced by the royalty fees they have to pay to the licensor.

How to fill out a Licensing Agreement?

For individuals interested in drafting a licensing agreement, you can find a PDF version of a licensing agreement template on any online document database that offers legal templates. You can download and print the document to be filled out manually. Alternatively, you can fill out the document electronically using PDFRun.

Opening Paragraph

This part of the document details important information that must be established before any of the terms and conditions are formed.

First, input the day, month, and year when the agreement will take effect after signing (Effective Date). Then, you must input the complete name of the person who owns the intellectual property (Licensor) and the person who is being licensed to use the intellectual property (Licensee)

You must also input the addresses where both parties are currently found.

This opening paragraph also details different sets of terminologies to be used in the agreement to refer to different concepts:

• “Party” or “Parties” - can refer to the licensee, licensor, or both as a collective.
• “Affiliate” - an entity controlled by the Licensee. Control is denoted as having 50% or more voting power.
• Licensed IP - The intellectual property that is to be shared between Parties.

This part of the agreement closes with the confirmation that:

• The Licensor owns the Licensed IP and;
• The Licensee desires the right to use the Licensed IP under the terms of the Licensor.

NOW THEREFORE

This is where each term and condition will be detailed to complete the agreement.

1 License

This section is where the licensor will list down the Licensed IP that they want to grant the licensee the right for. Input the complete and registered name of each Licensed IP. If you have more than three intellectual properties to license, attach a separate paper labeled “Exhibit A”.

In addition, input for what purpose you are licensing the intellectual property is to be used. If you are allowing the licensee to use your intellectual products in other countries, list them down here as well.

2 Exclusion of All Other Rights

Only the rights that are written in this agreement will be valid in terms of how the licensee and licensor will handle the intellectual property. Most notably, this agreement will not transfer ownership of the Licensed IP between parties.

3 Consideration

This section is where the Parties can detail the amount to be paid by the licensee for the license granted. In addition, the royalty fees can also be detailed here.

Input the kind of payment, the payment due date, and the amount to be paid by the licensee for each payment.

Input how many days before the due date each payment must be made. If a payment is late, the licensee must pay any collection fees as well as court and reasonable attorney fees.

4 Right to Sublicense

This section details that the licensee will not have any right to grant sublicenses of the Licensed IP to a third party unless such action has written approval from the Licensor.

5 Affiliates

Affiliates can be given sublicenses without the written permission of the Licensor. Once given a sublicense, Affiliates must follow all terms and conditions that are written in this agreement.

6 Copies

The Licensee cannot make copies of the Licensed IP unless approved by the Licensor.

7 Intellectual Property Notice and Markings

The Licensee will not have the right to remove or deface any intellectual property notice, trademark, or anything of the kind on the Licensed IP.

8 Quality Control

The licensee must use the Licensed IP under the reasonable standards of the Licensor.

9 Ownership of Licensed IP

The Licensee must agree that in whatever event, the Licensor shall remain the sole and exclusive owner of the Licensed IP.

10 Confidential Information

The Licensee must agree that any Confidential Information that is shared by the Licensor must not be shared or disseminated without the authorization of the Licensor.

11 Exceptions to Confidential Information

The following cannot be considered Confidential Information:

• Information that is made publicly available through no fault of the Licensee
• Information that is lawfully obtained from a third party has the right to disclose.
• Information disclosed under the express written approval of the Licensor.
• Information that has been developed without the use and benefit of any Confidential Information.
• Information that is required to be disclosed by law.

12 Survival of Confidential Information

The terms regarding confidentiality will remain for some years even after the agreement has been terminated. Input the number of years this obligation to confidentiality will persist after the termination of the agreement.

12 Licensee’s Diligence

The Licensee agrees to protect the Licensed IP from unauthorized use and other forms of misuse.

13 Legal Action

The Licensor will maintain all rights and control over the legal affairs concerning the Licensed IP.

14 Mutual Representations and Warranties

Each Party agrees that:

• Both parties can enter this agreement and have both contemplated entering the said agreement.
• Both parties execute this agreement under legal validity.

15 Licensor’s Representations and Warranties

The licensor agrees that:

• The Licensor owns and controls the rights given to the Licensee.
• The Licensed IP does not violate any of the following:
  • Copyright or other proprietary rights of a third party
  • Any applicable law
• The Licensor is not aware of any claim that would invalidate the licensor’s right to enter into this agreement.

16 No Warranties

The Licensee acknowledges the following:

• The Licensor is providing the Licensed IP on an “AS IS” basis with no warranty
• The Licensor has not modified the Licensed IP to any of the Licensee’s requests.
• The Licensor does not represent or warrant valuing, using, selling, or exploiting of the Licensed IP by the Licensor or any other third party.

17 Laws and Regulations

The Licensee agrees to comply and to make Affiliates comply with any applicable laws and regulations regarding the licensed IP.

18 Indemnification by Licensor

Licensor will not be obligated to indemnify, defend, and hold harmless the Licensee from claims, demands, legal actions, and expenses regarding the use of the Licensed IP

18 Indemnification by Licensee

Licensor must indemnify, defend, and hold harmless the Licensor from claims, demands, legal actions, and expenses regarding the use of the Licensed IP. However, if such legal actions arise from wilful misconduct of the Licensor, the Licensee is not obligated to defend them.

19 Indemnification Procedure

When the Licensor receives a notice of indemnification, they must describe to the Licensee the situation in reasonable detail. The Licensee is responsible for the defense and settlement of the claim and the Licensor will have the right to participate in the defense, however, they are not obligated to do so.

20 Limitations of Liability

Aside from limitations set by law, parties are not liable to each other in situations of damaged and lost profits or data. These limitations may not be valid in some states. Furthermore, the licensor cannot limit the licensee’s warranty or remedies to any illegal extent.

21 Term

Input for how many years the agreement will be effective starting from the Effective Date written in the opening paragraph

22 Termination

This agreement can be terminated if either party fails to meet their duties as detailed in the agreement. Either party can send a notice to the other detailing grounds of the termination. If the problem is not solved by the guilty party within some amount of days (input the amount), then the agreement will be terminated.

23 Assignment

This agreement cannot be assigned to any entity without the express written consent of the Licensor. The use of the Licensed IP will mainly be for the benefit of the Licensor and their successors and permitted assigns.

24 Severability

If a section of this document is deemed invalid or unenforceable by a competent court of jurisdiction, the rest of the agreement will be kept in full effect. In this case, the parties must negotiate a valid substitute clause to replace the invalidated one.

25 No Waiver

This agreement cannot be modified or altered without the signed approval of both Parties.

26 Entire Agreement

All attachments and all clauses combined are the entirety of the agreement. This agreement supersedes any other related agreements, oral or written.

27 Governing Law

Input what state law this Agreement will be following

28 Disputes

Input what state courts will resolve disputes concerning this agreement.

29 Notices

Notices concerning this agreement can be delivered to the addresses written in the introductory paragraph. Notices given personally will be considered communicated upon receipt. Mailed notices will be deemed communicated after two (2) days of mailing.

30 Amendments

This agreement can be amended by the Licensor to remove or add any Licensed IP. The Licensor must notify the Licensee so that they can also modify the agreement to have them amend the fees. Input how often within the term of the agreement can modifications occur.

IN WITNESS THEREOF,

Licensor’s Signature

Affix the Licensor’s signature here.

Licensee Signature

Affix the Licensee’s signature here.

Licensor Full Name

Input the complete name of the Licensor

Licensee Full Name

Input the complete name of the Licensee

Licensor Representative

If the licensor has a representative, input their name and signature.

Licensee Representative

If the Licensee has a representative, input their name and signature.

Licensor Company Title

Input the company title of the Licensor Representative.

Licensee Company Title

Input the company title of the Licensee Representative.

Frequently Asked Questions About a Licensing Agreement

What are the six components of a licensing agreement?

For a licensing agreement to be valid, it must include six essential components:

1. The names and addresses of the licensor and licensee — For obvious reasons, these must be included for the contract to be binding. Without these details, it would be difficult to track down either party should something go wrong.
2. A description of the licensed material — This could be a patent, copyright, trademark, or some other type of Intellectual Property. It’s important to include a clear description so that there is no confusion about what is being licensed. Also, if the licensed material is ever sold or transferred, this section will help to determine who the new owner is.
3. The term of the agreement — This is how long the agreement will be in effect. It’s important to have a set term so that both parties know when they need to renegotiate or end the agreement.
4. The territory — This refers to where the licensed material can be used. For example, if a company only has the right to use a patent in the United States, they can’t sell products that use that patent in other countries.
5. The grant — This is what the licensee is allowed to do with the licensed material. For example, they may be granted the right to use the patent for a certain amount of time, or they may be allowed to sell products that use the copyrighted material.
6. The consideration — This is what the licensee will pay the licensor in exchange for the rights granted in the agreement. This could be a one-time payment, or it could be ongoing royalties. As a general rule, the more valuable the licensed material is, the higher the consideration will be.

These are the six essential components of a licensing agreement. If any of these are missing, the agreement may not be binding. As such, it’s important to make sure that all six are included before signing any contract.

What is the purpose of licensing?

In essence, licensing is a way for businesses to protect their intellectual property (IP) and ensure that they are compensated for its use. By licensing their IP, businesses can control how it is used, by whom, and for what purpose. In return for this control, businesses typically grant licenses in exchange for a fee or other form of compensation.

The following are the major purposes of licensing:

1. To generate revenue — Licensing is often seen as a way to monetize a company’s IP, especially if it is not core to the business’s operations. For example, a company that owns a valuable patent may license it to others in return for a royalty fee.
2. To control the use of IP — Licensing can be used to protect IP and ensure that it is used by the licensor’s wishes. For example, a company may license its trademarks to another business on the condition that the trademark is only used in connection with certain products or services.
3. To create new markets — Licensing can be used to enter new markets or expand into new geographical areas. For example, a company may license its technology to another business in a new market, allowing the licensee to sell products or services that incorporate the licensor’s IP.
4. To build relationships — Licensing can be used to build relationships with other businesses, including potential competitors. For example, a company may license its IP to another business in return for a royalty-free license to use the licensee’s IP.
5. To obtain access to IP — Licensing can be used to obtain access to IP that is owned by another business. For example, a company may license technology from another business to incorporate it into its products or services.
6. To comply with regulations — In some cases, licensing may be required to comply with government regulations. For example, a company that manufactures products that use certain chemicals may be required to obtain a license from the government to do so.
7. To avoid litigation — Licensing can be used to avoid potential litigation down the road. For example, a company may choose to license its IP to another business rather than risk being sued for infringement.
8. To settle litigation — Licensing can also be used to settle litigation that has already been filed. For example, a company may agree to license its IP to another business to avoid an expensive court battle.
9. To establish ownership — In some cases, licensing can be used to establish ownership of IP. For example, a company may license its IP to another business to prove that it is the rightful owner of the IP.
10. To protect trade secrets — Licensing can also be used to protect trade secrets. For example, a company may choose to license its IP to another business rather than reveal its trade secrets to the public.

These are the major purposes of licensing. However, there can be other reasons why a company chooses to license its IP. Ultimately, it is up to the company to decide what is best for its business and its IP.

Why should a company use a licensing agreement?

There are many reasons why a company might want to use a licensing agreement. For example, a company may want to:

1. Protect its intellectual property — A licensing agreement can help a company protect its intellectual property, such as patents, trademarks, and copyrights.
2. Generate revenue — A licensing agreement can be a way for a company to generate revenue from its intellectual property.
3. Expand its product offerings — A licensing agreement can allow a company to offer new products or services without incurring the cost of developing them itself.
4. Enter new markets — A licensing agreement can enable a company to enter new markets without having to establish a physical presence there.
5. Build brand awareness — A licensing agreement can help a company build brand awareness and visibility for its products or services.
6. Strengthen relationships with customers — A licensing agreement can help a company strengthen its relationships with customers by providing them with access to new products or services.
7. Enhance customer loyalty — A licensing agreement can help a company enhance customer loyalty by providing them with exclusive access to new products or services.
8. Reduce risks — A licensing agreement can help a company reduce the risks associated with developing and marketing new products or services.
9. Gain a competitive advantage — A licensing agreement can give a company a competitive advantage over its rivals by allowing it to offer new products or services first.
10. Increase profits — A licensing agreement can help a company increase its profits by allowing it to generate revenue from its intellectual property.

These are just some of the reasons why a company might want to use a licensing agreement. Ultimately, the decision of whether or not to use a licensing agreement depends on the specific needs and goals of the company.

What are the types of licenses?

There are several types of licenses:

• Exclusive — An exclusive license means that the licensee is the only party who is allowed to use the licensed property.
• Non-exclusive — A non-exclusive license means that the licensee is not the only party who is allowed to use the licensed property.
• Transferable — A transferable license means that the licensee can transfer (or sell) their rights under the agreement to another party.
• Nontransferable — A nontransferable license means that the licensee cannot transfer their rights under the agreement to another party.
• Perpetual — A perpetual license means that the agreement does not have an expiration date and will continue until terminated by either party.
• Terminable — A terminable license means that the agreement has an expiration date or can be terminated by either party.

These are just a few of the different types of licenses that exist. It's important to understand the type of license you're signing before agreeing to anything.

What should be included in a licensing agreement?

A general licensing agreement should include the following:

• The name and contact information of the licensor and licensee
• A description of the licensed material
• The duration of the license
• The territory in which the license is valid
• Any restrictions on the use of the licensed material
• The fees or royalties payable to the licensor
• The payment schedule
• The renewal terms
• The termination provisions
• The dispute resolution provisions

If the licensed material is software, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use, modification, and distribution of the software
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated

If the licensed material is a trademark or copyright, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use of the trademark or copyright
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated

If the licensed material is a patent, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use of the patented invention
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated

If the licensed material is a trade secret, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use of the trade secret
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated

If the licensed material is a work of authorship, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use of the work
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated

If the licensed material is a tradename, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use of the trade name
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated

If the licensed material is a logo, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use of the logo
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated.

If the licensed material is a domain name, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use of the domain name
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated

If the licensed material is a website, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use of the website
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated

If the licensed material is an online service, the agreement should also include:

• The rights and restrictions granted to the licensee concerning the use of the online service
• The warranty and support terms provided by the licensor
• The liability limitations imposed on the licensor by the agreement
• The license agreement should be signed by both parties and dated

These are just some examples of the types of licensing agreements that may be used. The specific terms and conditions of a particular agreement will depend on the nature of the licensed material and the needs of the parties involved.

Both parties should read over the agreement carefully before signing to make sure they understand all of the terms and conditions. Once the agreement is signed, it is a legally binding contract and both parties are obligated to uphold their end of the deal. Breaking the terms of a licensing agreement can lead to serious consequences, including legal action. Therefore, it is important to be familiar with all of the details before agreeing to anything.

What are the disadvantages of a licensing agreement?

Several disadvantages can be associated with licensing agreements:

• The licensor may lose control over how the licensed product is used or sold.
• The licensee may gain an unfair competitive advantage over other businesses that don't have a licensing agreement in place.
• The terms of the licensing agreement may be unfavorable to the licensor, such as granting the licensee exclusive rights to sell the licensed product in a certain territory.
• The licensing agreement may be expensive to negotiate and maintain.
• Licensing agreements can be complex and difficult to understand for those not familiar with them.
• The licensor may be required to provide ongoing support or updates to the licensee, which can be costly and time-consuming.
• There is always the risk that the licensee will breach the terms of the licensing agreement, which can lead to legal disputes.

These are just some of the potential disadvantages that can be associated with licensing agreements. It's important to weigh all the pros and cons before entering into any such agreement.

What is the purpose of a license?

A license is an agreement that provides a person or organization with the right to use another person's or organization's copyrighted material. The purpose of a license is to ensure that the copyright holder retains control over how their work is used, while also allowing others to use it for specific purposes. Without a license, anyone who wanted to use the copyrighted material would need to get permission from the copyright holder, which can be difficult and time-consuming. A license makes it easier for people to use copyrighted material while also protecting the rights of the copyright holder.

What are the differences between licensing and franchising?

Definition:

Licensing — A license is an agreement between two parties in which one party grants another party the right to use its intellectual property, such as a patent, trademark, or copyright. The licensee agrees to abide by certain terms and conditions set forth by the licensor.

Franchising — A franchise is an agreement between two parties in which the franchisor grants the franchisee the right to use its business model and brand. The franchisee agrees to abide by certain terms and conditions set forth by the franchisor

Both licensing and franchising are forms of business collaboration that allow businesses to expand their reach and tap into new markets. However, there are some key differences between the two agreements.

For instance, with a license, the licensee does not typically have to make a significant investment, such as purchasing a franchise and is not usually required to undergo extensive training. With a franchise, on the other hand, the franchisee must make a significant investment and often undergoes extensive training to be able to operate the business. Additionally, with a license, the licensee is typically free to modify the intellectual property as they see fit, whereas, with a franchise, the franchisor usually has strict control over how the business is operated. Finally, licenses are typically for shorter terms than franchises. For all of these reasons, it is important to carefully consider which type of agreement is right for your business before entering into any kind of collaboration.

Related Articles:

• Licensing Agreement - Definition, Example, Pros, and Cons
• Licensing Agreement Definition
• Licensing Agreements: The Basics
• Licensing Agreement: What Is It? 5 Elements To Include
• Creating a Licensing Agreement to Benefit Both Parties