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LegalCornerTM - Licensing F.A.Q.'s

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Q.What are the essential terms in a license agreement?

A.A license gives one or more persons the right to use someone elseís asset(s). A License Agreement spells out the precise terms of those rights and the corresponding obligations. Common examples of a License Agreement are Trade Name License, Trademark License, Copyright License, Patent License, and Software License agreements. When you buy a software product, you only buy the right to use the software in limited ways ó you donít buy "ownership" of the software. If you are negotiating to obtain a license as the licensee, or if you find yourself in the situation of providing a license as a licensor to someone else, the License Agreement should address the following key points:

  1. Exclusivity/Nonexclusively: The license can be exclusive or nonexclusive with respect to territory, purpose, and/or time.

  2. Term: The license should set forth the length of the license, plus any renewal rights.

  3. Payment: The license must clearly state how and when upfront payments and any periodic payments are required to maintain the license.

  4. Restrictions on use of the license: The license should set forth any and all restrictions on use of the license, e.g., geographic areas, designated purposes, number of licensees, etc..

  5. Warranties: The licensee should contain a statement that the licensor actually owns the licensed item and it does not infringe on the rights of any third parties.

  6. Termination: The license should set forth the various circumstances upon which the Licensor may terminate the license early, e.g. failure to pay royalties on time.

© Copyright 1999-2019 Melissa C. Marsh. All Rights Reserved. All Information on this website is subject to a Disclaimer and Use Agreement. This information is provided as general information only and should not be construed as legal advice. We advise you to seek the advice of competent legal counsel to address your own specific questions, facts and circumstances.