An intellectual property licence agreement describes how and when a person is granted rights to use intellectual property (IP). The licence agreement may also set out the purpose for which IP can be used and when the licence comes to an end.
Anyone who owns intellectual property must ensure that they carefully word IP agreements. One wrong word and you could be giving up commercially valuable rights or not receiving the rights you require.
In this article, our technology and intellectual property lawyer explains what an intellectual property licence agreement is, looks at its key terms and answers some commonly asked questions.
An intellectual property licence agreement defines the specific rights granted to use intellectual property, including the conditions under which it can be used.
It’s crucial to ensure that the licensor has the right to grant the licence, either through ownership or proper authority.
Accurately identifying the licensee is essential for the enforceability of the agreement.
The agreement should clearly outline any restrictions on how the IP can be commercialised or adapted.
A licence to use intellectual property gives someone a limited right to use the intellectual property specified under the licence.
There are many ways a licence agreement can be used, for example:
Learn more about intellectual property law in our guide.
Intellectual property is often unique and can have significant commercial value.
Examples of highly valuable intellectual property include:
It’s easy to see that, if the words of an intellectual property licence agreement are not properly drafted, the value of the IP may be lost. IP may also be unintentionally given to someone else.
Below, we explore some of the key considerations when dealing with intellectual property licences:
It’s important to know that a person cannot give a right to use intellectual property that they don’t:
Some types of intellectual property may be registered, such as a trade mark. However, other types of IP may not be so easy to determine who owns it. For example, a person may appear to own copyright in a design but they could have actually transferred ownership to someone else.
IP ownership in Australia is not recorded on a public register or available to check. You may be able to register certain IP as trade marks, but this is not always possible.
IP lawyers can solve this issue by drafting appropriate warranties and indemnities to an intellectual property licence agreement. In these clauses, the person granting the licence will warrant (i.e. promise) they own the IP or have the right to grant a licence. If this promise is broken, the person then has to indemnify (i.e. reimburse) the other person who was granted the licence.
The agreement needs to clearly state who will receive the rights to the intellectual property. This could be a person, company, or organisation.
Ensuring the correct identification of the licensee is fundamental to the integrity of any IP licence agreement. The licensee is the party granted the rights to use, exploit, or benefit from the intellectual property.
If a licence agreement doesn’t accurately describe who gets the IP rights, it may not be enforceable.
For individuals, provide your full name and address. For companies and businesses, include the ABN or ACN. I recommend hiring an IP lawyer to check the party’s legal name.
Learn more about intellectual property agreements for businesses in our guide.
A licence should have a clear start and end date. This does not necessarily mean that you have to specify the day, month or year. The licence begins on a specific date or when a condition is met or an event occurs.
The same goes for the end date. Will the licence end on a specific date or will it apply forever provided that certain conditions are met?
An example of this is a publishing agreement. The publisher can use the author’s works for publishing without a specific end date. Generally, the agreement stipulates that if the book doesn’t sell for six months, the author can end the agreement and the intellectual property licence is revoked.
IP licence agreements can allow the licensee to use the IP in any way they wish, as well as allow the IP owner to control the usage and profit generation of the intellectual property.
For example, is the licensee only allowed to use the IP for internal business purposes, or can they sell or adapt the IP and make money from it?
I’ve seen lots of agreements that let you use intellectual property in exchange for something. This might be royalties, a right for the owner to share in profits or receive the benefit of any improved IP. An intellectual property licence agreement will often involve both parties receiving some sort of benefit.
Intellectual property is the unique and creative output of the mind. An idea is not just the artistic or other creative representation of that idea. Check out our comprehensive guide on intellectual property.
As an example, an idea to write a book is not IP. However, the written words on the page (being the creative expression of the idea) is copyright and capable of legal protection.
Reach out to our experienced publishing lawyers to learn more about IP in books and manuscripts.
An IP licence agreement will only protect confidential information if it includes confidentiality clauses. A difference exists between having a right to use IP and having an obligation not to disclose the IP to others.
We suggest hiring a IP contract lawyer who has experience in intellectual property contracts to create your licence agreement. Using free online templates for contracts can be risky if you don’t understand the clauses or how the contract works in practice.
Learn more about intellectual property clauses here.
Contact us for a free consultation
We provide legal advice to business and individuals across Australia, no matter which State or Territory you are located. Our easy-to-access, online legal services mean that you can talk to our lawyers wherever you are, at a time that suits you.
4.8
Google Reviews
Don’t hesitate – reach out for your free legal assistance today. Your peace of mind is just a click or call away!
Publishing copyrighted works without revealing the owner’s identity has become increasingly common. Because of this, it can be harder to obtain permission and use materials without knowledge of the owner.
Owning copyright gives the owner a right to grant licences to that copyright. A person who receives certain rights may also possess the right to grant a license. Copyright ownership
Common law trademarks are unregistered trademarks protected under Australian Common Law principles. They are not registered but enjoy protection based on their use and goodwill. In this article, Farrah Motley,
