New York IP License Agreement

NEW YORK IP LICENSE AGREEMENT

Governed by the Laws of the State of New York
For Use with Patents, Copyrights, Trademarks, Trade Secrets, Software, and Know-How

TABLE OF CONTENTS

1. Parties and Effective Date
2. Recitals
3. New York-Specific Definitions
4. License Grant and Scope
5. Consideration and Payment — NY Tax and Usury Provisions
6. Performance Standards, Records, and Audit
7. Intellectual Property Protection Under NY and Federal Law
8. Confidentiality and NY SHIELD Act
9. Representations and Warranties
10. Covenants and Restrictions — Including NY Non-Compete Standards
11. Indemnification
12. Limitation of Liability
13. Term and Termination
14. Default and Remedies — NY Prejudgment Interest and Commercial Division
15. Dispute Resolution — NY Governing Law, Forum, and Jury Waiver
16. General Provisions (NY-Specific)
17. Execution Block
18. Exhibit A — Licensed IP Schedule
19. Exhibit B — Arbitration Opt-Out

1. PARTIES AND EFFECTIVE DATE

This New York IP License Agreement (this "Agreement") is made effective as of [__/__/____] (the "Effective Date") by and between:

LICENSOR:
Name: [________________________________]
Entity Type: [________________________________]
State/Country of Formation: [________________________________]
Principal Office: [________________________________]
NY Secretary of State Filing (if applicable): [________________________________]

LICENSEE:
Name: [________________________________]
Entity Type: [________________________________]
State/Country of Formation: [________________________________]
Principal Office: [________________________________]
NY Secretary of State Filing (if applicable): [________________________________]

2. RECITALS

WHEREAS, Licensor owns or controls certain intellectual property as described in Exhibit A, which may include patents, copyrights, trademarks (including marks registered with the New York Department of State under GBL Art. 24), trade secrets, software, and proprietary know-how;

WHEREAS, Licensee desires to obtain a license to exploit such intellectual property within a defined field and territory;

WHEREAS, both Parties intend to avail themselves of the protections of New York contract law, including the enforceability of choice-of-law clauses under GOL § 5-1401 and choice-of-forum clauses under GOL § 5-1402;

WHEREAS, the Parties acknowledge their obligations under the SHIELD Act (GBL §§ 899-aa/899-bb) to the extent the Licensed IP involves processing of Private Information of New York residents;

WHEREAS, the Parties acknowledge that certain IP transfers may trigger New York sales and use tax obligations under Tax Law Art. 28;

NOW, THEREFORE, the Parties agree as follows:

3. NEW YORK-SPECIFIC DEFINITIONS

"Affiliate" means any entity controlling, controlled by, or under common control with a Party.

"Authorized Sublicensee" means a sublicensee approved in writing by Licensor.

"Confidential Information" has the meaning in Section 8.1.

"Dilution" means likelihood of dilution of a distinctive mark under GBL § 360-l, which does not require proof of competition or actual confusion.

"Effective Date" means the date set forth in Section 1.

"ESRA" means the Electronic Signatures and Records Act, N.Y. State Tech. Law Art. 3, §§ 301–309.

"Field of Use" means [________________________________].

"Fine Art" means works of fine art as defined in N.Y. Arts & Cultural Affairs Law § 11.01(1).

"Licensed IP" means the intellectual property described in Exhibit A, including all patents, copyrights, trademarks (including NY State Registrations), trade secrets, software, know-how, and associated Documentation.

"Net Sales" means gross amounts received by Licensee from exploitation of the Licensed IP, less: (a) returns; (b) trade discounts; (c) NY sales/use taxes (Tax Law Art. 28); and (d) shipping.

"NY State Registration" means a trademark registration under GBL § 360-a.

"Private Information" has the meaning in GBL § 899-aa(1), including social security numbers, driver's license numbers, financial account numbers with security codes, and biometric data.

"Products" means products or services incorporating or derived from the Licensed IP.

"Territory" means [________________________________].

4. LICENSE GRANT AND SCOPE

4.1 Grant. Subject to this Agreement, Licensor grants Licensee a:

☐ Exclusive / ☐ Non-Exclusive / ☐ Sole

non-transferable, royalty-bearing license to use, reproduce, display, perform, distribute, and otherwise exploit the Licensed IP within the Field of Use and Territory during the Term.

4.2 Reservation. All rights not expressly granted are reserved by Licensor.

4.3 Sublicensing. Licensee may grant sublicenses only to Authorized Sublicensees approved in writing by Licensor. Each sublicense must incorporate terms no less protective of Licensor. Licensee remains responsible for all sublicensee acts.

4.4 Trademark Quality Control. To the extent Licensed IP includes trademarks:

(a) Licensee shall comply with Licensor's written trademark guidelines and quality standards;
(b) Licensor may inspect Products on reasonable notice;
(c) All goodwill generated through use of Licensed IP trademarks inures to Licensor (GBL § 360-n; 15 U.S.C. § 1055);
(d) Licensee shall not use trademarks in a manner constituting dilution under GBL § 360-l.

4.5 Consumer Protection. All Products and associated marketing must comply with GBL § 349 (deceptive practices) and § 350 (false advertising).

5. CONSIDERATION AND PAYMENT — NY TAX AND USURY PROVISIONS

5.1 Up-Front Fee. $[________________________________], non-refundable, due within [____] days of the Effective Date.

5.2 Royalties. [____]% of Net Sales, payable quarterly within thirty (30) days of each quarter end, accompanied by a certified statement of Net Sales.

5.3 Late Payments — NY Usury Compliance.

(a) Overdue amounts accrue interest at the lesser of [____]% per month or the maximum permitted by New York law.
(b) Civil Usury Cap: 16% per annum (GOL § 5-501).
(c) Criminal Usury: Rates exceeding 25% per annum constitute criminal usury (N.Y. Penal Law § 190.40).
(d) Any excess interest is automatically reduced to the lawful maximum.

5.4 NY Sales and Use Tax.

(a) Software Licenses: Prewritten software is generally taxable under Tax Law § 1105(a).
(b) Trademark Royalties: Generally not subject to NY sales tax when paid for the right to use a mark, but bundled transactions may be taxable.
(c) Patent Licenses: Generally not subject to NY sales tax.
(d) Fine Art: Transfers of Fine Art may trigger sales tax; consult Tax Law § 1105(a) and applicable regulations.
(e) Licensee is responsible for all taxes except those on Licensor's net income.

5.5 Taxes. If Licensee claims exemption, Licensee shall provide NY Form ST-120 or ST-121 before the first invoice.

6. PERFORMANCE STANDARDS, RECORDS, AND AUDIT

6.1 Diligence. Licensee shall use commercially reasonable efforts to develop, market, and sell Products.

6.2 Records. Licensee shall maintain records sufficient to verify amounts payable for at least six (6) years after the relevant period, consistent with the CPLR § 213 statute of limitations.

6.3 Audit. Licensor may audit Licensee's relevant records no more than twice per calendar year on at least ten (10) business days' notice. If underpayment exceeds 5%, Licensee pays audit costs and remits underpaid amounts plus interest within ten (10) days.

7. INTELLECTUAL PROPERTY PROTECTION UNDER NY AND FEDERAL LAW

7.1 Prosecution. Licensor controls prosecution and maintenance of all patents, copyrights, and trademark registrations (including NY State Registrations) at Licensor's expense.

7.2 Enforcement.

(a) Each Party shall promptly notify the other of known or suspected infringement.
(b) Licensor has the first right to enforce. Licensee shall cooperate and join if required for standing, at Licensor's expense.
(c) Recoveries: first to reimburse litigation costs, then divided [________________________________].

7.3 NY Anti-Dilution. For trademark components of the Licensed IP, Licensor may pursue dilution claims under GBL § 360-l, which provides protection based on likelihood of dilution without requiring competition or actual confusion.

7.4 Patent Marking. Licensee shall comply with 35 U.S.C. § 287 patent marking requirements for all patented Products.

7.5 Copyright Notice. Licensee shall include appropriate copyright notices on all copyrighted materials per 17 U.S.C. § 401.

8. CONFIDENTIALITY AND NY SHIELD ACT

8.1 Definition. "Confidential Information" means all non-public information designated as confidential or reasonably understood to be confidential.

8.2 Obligations. Each Party shall: (a) maintain strict confidence; (b) use only for this Agreement; (c) disclose only to personnel with a need to know bound by confidentiality obligations.

8.3 Exclusions. Information that: (a) is publicly available without breach; (b) was lawfully known; (c) is independently developed; or (d) is received from a third party without restriction.

8.4 Compelled Disclosure. Permissible upon court order, with prompt notice and cooperation to limit scope.

8.5 SHIELD Act Compliance. If either Party processes Private Information in connection with the Licensed IP:

(a) Each Party shall implement reasonable safeguards under GBL § 899-bb, including administrative, technical, and physical controls;
(b) Breach notification to affected NY residents must occur within 30 days (per 2024 amendment to GBL § 899-aa);
(c) Required notifications to the NY Attorney General, Division of Consumer Protection, and State Police;
(d) The Party experiencing the breach shall notify the other Party within 48 hours of discovery.

8.6 SHIELD Act Safe Harbor. Compliance with GLBA, HIPAA/HITECH, 23 N.Y.C.R.R. Part 500, or other applicable federal/NY security regulations satisfies GBL § 899-bb.

9. REPRESENTATIONS AND WARRANTIES

9.1 Mutual. Each Party represents it has full power and authority, is duly organized and in good standing, and that this Agreement is binding and enforceable. If a foreign entity transacting business in New York, it is authorized under N.Y. Bus. Corp. Law § 1301 or applicable formation statute.

9.2 Licensor. Licensor represents: (a) it owns the Licensed IP or has sufficient rights to grant the License; (b) to Licensor's knowledge, the Licensed IP does not infringe third-party rights; (c) any NY State Registrations in Exhibit A are current and not cancelled under GBL § 360-e.

9.3 Disclaimer. EXCEPT AS EXPRESSLY STATED, LICENSOR MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING MERCHANTABILITY, FITNESS, OR NON-INFRINGEMENT.

10. COVENANTS AND RESTRICTIONS — INCLUDING NY NON-COMPETE STANDARDS

10.1 Use Restrictions. Licensee shall not: (a) use the Licensed IP outside the Field or Territory; (b) remove proprietary notices; (c) challenge Licensor's ownership; or (d) reverse engineer except as permitted by law.

10.2 Notice of Infringement. Each Party shall promptly notify the other of any known or suspected infringement. Licensor has the first right to enforce at its cost. Licensee shall cooperate.

10.3 Non-Compete (If Applicable).

☐ Not applicable to this Agreement.
☐ Applicable: Licensee shall not, during the Term and for [____] months after termination, directly compete with Licensor in [________________________________].

NY Non-Compete Practice Notes:

(a) Under BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), non-compete provisions must satisfy a three-prong test: (i) no greater than required to protect legitimate interests; (ii) no undue hardship on the restricted party; (iii) not injurious to the public.

(b) Pending Legislation — S.4641-A (2025 Session): This bill, which passed the NY Senate in June 2025, would prohibit most non-compete agreements except for "highly compensated individuals" earning $500,000+ annually. If enacted, any permissible non-compete may not exceed one year and must include salary continuation during the restriction period. Counsel must verify whether this legislation has been enacted before including non-compete provisions.

(c) New York courts may blue-pencil overbroad restrictive covenants to the extent necessary for enforcement.

10.4 No Assignment. Licensee shall not assign or transfer this Agreement without Licensor's prior written consent, except as permitted in Section 16.2.

11. INDEMNIFICATION

11.1 Licensor IP Indemnity. Licensor shall indemnify, defend, and hold harmless Licensee from any third-party claim that the Licensed IP infringes or misappropriates IP rights, provided Licensee promptly notifies Licensor and permits control of the defense.

11.2 Exclusions. No obligation for claims arising from: (a) modifications not approved by Licensor; (b) use outside Field/Territory; (c) combinations not authorized by Licensor; or (d) use after notice to discontinue.

11.3 Licensee Indemnity. Licensee shall indemnify Licensor from claims arising from: (a) Licensee's breach; (b) defective Products; (c) violation of GBL §§ 349/350; or (d) gross negligence/willful misconduct.

11.4 Procedure. Prompt notice; sole control of defense by indemnifying Party; reasonable cooperation.

12. LIMITATION OF LIABILITY

12.1 Cap. Except for IP infringement claims, breach of confidentiality (Section 8), willful misconduct, or fraud, each Party's total liability shall not exceed amounts paid or payable in the twelve (12) months preceding the claim.

12.2 Exclusion. Neither Party is liable for indirect, incidental, consequential, special, punitive, or exemplary damages, even if advised of the possibility.

13. TERM AND TERMINATION

13.1 Term. Commences on the Effective Date and continues for [____] years unless earlier terminated.

13.2 Termination for Cause. Either Party may terminate for material breach not cured within thirty (30) days of written notice.

13.3 Insolvency. Either Party may terminate immediately upon the other's insolvency, bankruptcy filing, or assignment for benefit of creditors.

13.4 Effect. Upon termination: (a) Licensee ceases all use; (b) returns or destroys Confidential Information and Licensed IP materials; (c) pays all amounts due through termination; (d) delivers final Royalty report within [____] days.

14. DEFAULT AND REMEDIES — NY PREJUDGMENT INTEREST AND COMMERCIAL DIVISION

14.1 Remedies. The non-breaching Party may pursue all remedies at law or equity, including specific performance and injunctive relief.

14.2 Injunctive Relief. Unauthorized use of the Licensed IP or Confidential Information will cause irreparable harm. The non-breaching Party may seek injunctive relief in:

(a) The New York Supreme Court, Commercial Division (22 N.Y.C.R.R. § 202.70); or
(b) The applicable United States District Court,

without posting bond, to the extent permitted by law.

14.3 Prejudgment Interest. Under CPLR §§ 5001 and 5004, monetary judgments include prejudgment interest at 9% per annum from the earliest ascertainable date of the cause of action.

14.4 Attorneys' Fees. The prevailing Party recovers reasonable attorneys' fees and costs.

15. DISPUTE RESOLUTION — NY GOVERNING LAW, FORUM, AND JURY WAIVER

15.1 Governing Law. This Agreement is governed by New York law, without regard to conflict-of-laws principles.

NY Practice Note — GOL § 5-1401: Enforceable for transactions exceeding $250,000 even without a NY nexus.

15.2 Arbitration.

☐ Option A — No Arbitration. All disputes resolved in courts specified in Section 15.3.
☐ Option B — Binding Arbitration. Disputes not resolved by negotiation within thirty (30) days shall be finally resolved by binding arbitration administered by [________________________________] under its rules, seated in [________________________________], New York, by [____] arbitrator(s). Judgment on the award may be entered in any court of competent jurisdiction.

To opt out of arbitration, both Parties must execute Exhibit B.

15.3 Court Actions / Forum Selection. The Parties irrevocably submit to the exclusive jurisdiction of:

(a) The New York Supreme Court, Commercial Division (22 N.Y.C.R.R. § 202.70), County of [________________________________]; or
(b) The United States District Court for the [________________________________] District of New York.

NY Practice Note — GOL § 5-1402: For transactions exceeding $1,000,000, this clause bars forum non conveniens dismissal when a foreign party has agreed to submit to NY jurisdiction.

15.4 Jury Trial Waiver. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT.

15.5 Statute of Limitations Reference.

• Contract claims: six years (CPLR § 213(2))
• Patent infringement: six years from infringement (35 U.S.C. § 286)
• Copyright infringement: three years (17 U.S.C. § 507(b))
• GBL § 349/350 claims: three years (CPLR § 214(2))

16. GENERAL PROVISIONS (NY-SPECIFIC)

16.1 No Oral Modification — GOL § 15-301. This Agreement may not be changed orally. No amendment or waiver is effective unless in writing signed by the Party against whom enforcement is sought.

16.2 Assignment. Licensor may assign to an Affiliate or successor. Licensee may assign only with Licensor's prior written consent, except in connection with a merger or sale of substantially all assets where the assignee agrees to assume all obligations.

16.3 Severability. Invalid provisions are reformed to the minimum extent; remaining provisions remain in force.

16.4 Entire Agreement. This Agreement, together with Exhibits A and B, is the complete agreement, superseding all prior understandings.

16.5 Electronic Signatures — ESRA. This Agreement may be executed electronically under ESRA (N.Y. State Tech. Law Art. 3, §§ 301–309). Electronic signatures have the same legal effect as ink signatures.

NY Practice Note: New York did NOT adopt UETA. ESRA is New York's unique e-signature law. Practitioners must ensure the e-signature platform meets ESRA requirements and 9 N.Y.C.R.R. Part 540 standards, including attribution through applied security procedures.

16.6 Counterparts. May be executed in counterparts; each is an original.

16.7 Notices. Written notice by personal delivery, overnight courier, or certified mail (return receipt requested). Effective upon receipt.

16.8 Independent Contractors. The Parties are independent contractors. No agency, partnership, or joint venture is created.

16.9 Foreign Entity Authorization. Foreign entities doing business in New York must be authorized under N.Y. Bus. Corp. Law § 1304 or equivalent formation statutes.

17. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this New York IP License Agreement as of the Effective Date.

LICENSOR:

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

LICENSEE:

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

EXHIBIT A — LICENSED IP SCHEDULE

EXHIBIT B — ARBITRATION OPT-OUT

The undersigned Parties hereby elect to opt out of Section 15.2, Option B (Binding Arbitration). All disputes shall be resolved exclusively in the courts specified in Section 15.3.

LICENSOR:
Signature: [________________________________]
Date: [__/__/____]

LICENSEE:
Signature: [________________________________]
Date: [__/__/____]

SOURCES AND REFERENCES

• N.Y. Gen. Oblig. Law § 5-1401 — Choice of Law ($250K+)
• N.Y. Gen. Oblig. Law § 5-1402 — Choice of Forum ($1M+)
• N.Y. Gen. Oblig. Law § 5-501 — Usury Cap
• N.Y. Gen. Oblig. Law § 15-301 — No Oral Modification
• N.Y. Gen. Bus. Law Art. 24, § 360-l — Dilution
• N.Y. Gen. Bus. Law §§ 349–350 — Consumer Protection
• N.Y. Gen. Bus. Law §§ 899-aa, 899-bb — SHIELD Act
• N.Y. State Tech. Law Art. 3 — ESRA
• N.Y. Tax Law Art. 28 — Sales Tax on IP
• N.Y. Arts & Cultural Affairs Law — Fine Art Provisions
• N.Y. C.P.L.R. § 213 — Six-Year SOL
• N.Y. C.P.L.R. §§ 5001, 5004 — Prejudgment Interest (9%)
• 22 N.Y.C.R.R. § 202.70 — Commercial Division
• BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999) — Non-Compete Test
• S.4641-A (2025 NY Senate) — Non-Compete Legislation

END OF DOCUMENT