IP Licensing

Licensing your intellectual property is one of the most effective ways of exploiting your intellectual property rights.

A licence is basically legal permission granting a third party the right to exploit/use the intellectual property within the limits of certain terms and conditions which the intellectual property owner will have control over.

It is important that the owner of the intellectual property which is being licenced includes certain provisions within the licence agreement to prevent any unauthorised use of the intellectual property. Therefore the owner must, within the licence agreement:

  1. define how the third party will use the right and for what purpose
  2. ensure the third party does not dilute, tarnish, or damage the intellectual property in any way
  3. ensure that the agreement does not fall foul of competition law (i.e. that terms such as price fixing, or any other anti-competitive dominant terms are omitted)and
  4. include licence fees / payment terms.

The advantages of licensing your intellectual property is that you retain ultimate control over your intellectual property rights. Licensing is also a good source of income, especially if you are not yourself expoliting your own intelectual property rights.

There are important issues to consider before you decide to licence your intellectual property. For example, the following should be taken into account:

  • whether the licence will be exclusive or non exclusive
  • the geographical area the licence will cover
  • the duration of the licenceÂ
  • any possible marketing arrangements, i.e. advertising campaigns, websites etc
  • licence fees and
  • warranties and indemnities.

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