Texas IP License Agreement (IP-Focused)

TEXAS INTELLECTUAL PROPERTY LICENSE AGREEMENT

IP-Focused Template for Patent, Copyright, Trademark, and Trade Secret Licensing Under Texas Law

TABLE OF CONTENTS

1. Parties and Recitals
2. Definitions — Texas Statutory Framework
3. Licensed IP Description and Classification
4. Grant of License
5. Royalties, Fees, and Texas Usury Compliance
6. Texas Tax Treatment of IP Transfers
7. Performance Obligations and Diligence
8. Records, Audit, and Reporting
9. IP Protection, Prosecution, and Enforcement Under Texas Law
10. Trade Secret Protection Under TUTSA
11. Confidentiality
12. Quality Control (Trademark Components)
13. Representations and Warranties
14. Texas Non-Compete and Restrictive Covenant Compliance
15. DTPA Compliance
16. Indemnification
17. Limitation of Liability
18. Term, Termination, and Wind-Down
19. Default and Remedies Under Texas Law
20. Dispute Resolution — Venue, Jurisdiction, Jury Waiver
21. Force Majeure
22. General Provisions
23. Execution
24. Schedule 1 — Licensed IP Register
25. Schedule 2 — Royalty Calculations and Payment Schedule
26. Schedule 3 — Quality Standards (Trademark Components)

1. PARTIES AND RECITALS

This Intellectual Property License Agreement (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:

LICENSOR:
Name: [________________________________]
Entity Type: [________________________________] organized under the laws of [________________________________]
Principal Office: [________________________________]
Texas Registered Agent: [________________________________]
Texas Comptroller Taxpayer ID: [________________________________]
("Licensor")

LICENSEE:
Name: [________________________________]
Entity Type: [________________________________] organized under the laws of [________________________________]
Principal Office: [________________________________]
Texas Registered Agent: [________________________________]
("Licensee")

Each a "Party" and collectively the "Parties."

Recitals

A. Licensor owns or controls a portfolio of intellectual property rights including patents, copyrights, trademarks (registered in Texas under Tex. Bus. & Com. Code Ch. 16 and/or federally under the Lanham Act), trade secrets (protected under TUTSA, Tex. Civ. Prac. & Rem. Code Ch. 134A), and proprietary know-how, as catalogued in Schedule 1.

B. Licensee seeks a license to exploit certain of Licensor's IP within the Field of Use and Territory, and Licensor is willing to grant such rights subject to the quality controls, payment obligations, and protective covenants described herein.

C. The Parties intend this Agreement to comply with Texas law, including the DTPA, TUTSA, the Texas Trademark Act, Texas usury and interest statutes, and applicable Texas tax requirements.

D. The Parties acknowledge that breach of this Agreement may give rise to statutory remedies including attorney's fees under Tex. Civ. Prac. & Rem. Code § 38.001, exemplary damages for trade secret misappropriation under TUTSA § 134A.004(b), and treble damages for knowing DTPA violations under § 17.50(b)(1).

NOW, THEREFORE, for good and valuable consideration, the Parties agree:

2. DEFINITIONS — TEXAS STATUTORY FRAMEWORK

"Affiliate" means an entity controlling, controlled by, or under common control with a Party (>50% voting interest).

"Confidential Information" means non-public information designated or reasonably understood as confidential, including Trade Secrets.

"Consumer" has the meaning in Tex. Bus. & Com. Code § 17.45(4) — an individual, partnership, corporation, the state, or a subdivision that seeks or acquires goods or services by purchase or lease.

"DTPA" means Tex. Bus. & Com. Code § 17.41 et seq.

"Field of Use" means [________________________________].

"Improvement" means any modification, enhancement, derivative work, update, or improvement to the Licensed IP created by or for either Party.

"Licensed IP" means the intellectual property described in Schedule 1.

"Net Revenue" means gross revenue from Licensee's exploitation of the Licensed IP, less: (a) returns actually credited; (b) trade discounts actually allowed; (c) Texas sales/use taxes collected and remitted under Tex. Tax Code Ch. 151; and (d) separately invoiced shipping.

"Products" means goods or services incorporating the Licensed IP.

"Territory" means [________________________________].

"Trade Secret" means information deriving independent economic value from secrecy and subject to reasonable secrecy efforts, per Tex. Civ. Prac. & Rem. Code § 134A.002(6).

"TUTSA" means the Texas Uniform Trade Secrets Act, Tex. Civ. Prac. & Rem. Code Ch. 134A.

3. LICENSED IP DESCRIPTION AND CLASSIFICATION

3.1 IP Categories. The Licensed IP may include multiple categories of intellectual property, each subject to different Texas and federal legal frameworks:

3.2 Schedule 1. The Licensed IP is specifically catalogued in Schedule 1, organized by category, with registration numbers, filing dates, jurisdictions, and current status.

4. GRANT OF LICENSE

4.1 Grant. Subject to this Agreement, Licensor grants Licensee a [____] (exclusive / non-exclusive / sole), [____] (worldwide / Territory-limited), royalty-bearing license to [________________________________] (use, make, have made, sell, offer for sale, import, reproduce, display, distribute, perform) the Licensed IP within the Field of Use during the Term.

4.2 Sublicensing. [____] (Permitted with prior written consent / Permitted to Affiliates only / Not permitted). Each sublicensee must agree in writing to terms no less protective than this Agreement.

4.3 Retained Rights. Licensor retains all rights not expressly granted.

4.4 No Implied Licenses. No license is granted by implication, estoppel, or otherwise, except as expressly stated.

5. ROYALTIES, FEES, AND TEXAS USURY COMPLIANCE

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

5.2 Running Royalty. [____]% of Net Revenue, payable quarterly within [____] days after quarter-end, with certified statement.

5.3 Milestone Payments. Per Schedule 2.

5.4 Minimum Annual Royalty. Beginning Year [____]: $[________________________________] per year, credited against running royalties.

5.5 Late Payment Interest and Usury. Past-due amounts bear interest at [____]% per month, capped at the maximum rate under Tex. Fin. Code § 302.001 (10% per annum general cap; qualified commercial loans under Ch. 303/306 may permit higher rates as published by the Texas OCCC). Excess interest automatically reduced and credited to principal per § 302.001(b).

5.6 Prejudgment Interest. Accrues under Tex. Fin. Code § 304.003 — simple interest at the Federal Reserve prime rate at judgment (floor 5%, cap 15%). Accrual begins on the earlier of 180 days after written notice of claim or the date suit is filed.

6. TEXAS TAX TREATMENT OF IP TRANSFERS

6.1 Software Component — Sales Tax. Computer programs within the Licensed IP are "tangible personal property" under Tex. Tax Code § 151.009, taxable at 6.25% state plus up to 2% local regardless of delivery method (electronic or physical). Licensee shall provide address(es) of use for local tax computation.

6.2 Non-Software IP — Royalties. Royalties for patent, copyright (non-software), trademark, and trade secret licenses are generally payments for intangible rights not subject to Texas sales tax. However, if the Comptroller reclassifies any payment, the responsible Party shall remit the tax.

6.3 Texas Franchise Tax. Each Party certifies current franchise tax compliance under Tex. Tax Code Ch. 171. Licensee acknowledges that Net Revenue from Products may be included in Licensee's franchise tax total revenue and that royalties paid may qualify for cost-of-goods-sold deductions.

6.4 Exemption Certificates. If Licensee claims a sales tax exemption, Licensee must provide a valid certificate (Texas Form 01-339 or equivalent) before the first taxable payment.

6.5 Tax Indemnity. Each Party indemnifies the other for tax liability arising from its own non-compliance with this Section, including penalties and interest assessed by the Texas Comptroller.

7. PERFORMANCE OBLIGATIONS AND DILIGENCE

7.1 Commercialization Diligence. Licensee shall use commercially reasonable efforts to develop, market, and sell Products within the Territory. Licensee shall provide Licensor with a written commercialization plan within [____] days of the Effective Date and annual progress reports.

7.2 Performance Milestones. Failure to achieve milestones in Schedule 2 by the specified dates, without written extension, constitutes a material breach.

8. RECORDS, AUDIT, AND REPORTING

8.1 Records. Licensee shall maintain complete, accurate records of all Net Revenue calculations for at least four (4) years (consistent with the Tex. Civ. Prac. & Rem. Code § 16.004 four-year limitations period).

8.2 Audit. Licensor may audit records up to twice per year on [____] business days' notice. Underpayments exceeding 5% require Licensee to pay audit costs and remit shortfalls with interest within ten (10) days.

8.3 Quarterly Reports. Licensee shall deliver quarterly royalty reports within [____] days after quarter-end, itemizing Net Revenue by Product and Territory.

9. IP PROTECTION, PROSECUTION, AND ENFORCEMENT UNDER TEXAS LAW

9.1 Patent Prosecution. Licensor controls patent prosecution and maintenance at its expense. Licensee shall cooperate as reasonably requested.

9.2 Trademark Maintenance. Licensor shall maintain Texas Secretary of State trademark registrations under Tex. Bus. & Com. Code § 16.054 (five-year renewal) and federal USPTO registrations. Licensee shall provide specimens of use upon request.

9.3 Infringement Enforcement.

(a) Each Party shall promptly notify the other of known or suspected infringement in the Territory.
(b) [____] (Licensor / Licensee) has first right to enforce, including:

• Patent infringement (35 U.S.C. § 271);
• TX trademark infringement (Tex. Bus. & Com. Code § 16.102);
• TX dilution (§ 16.103);
• Federal trademark infringement (15 U.S.C. § 1114);
• Copyright infringement (17 U.S.C. § 501); and
• Trade secret misappropriation (TUTSA Ch. 134A; federal DTSA 18 U.S.C. § 1836).
  (c) The non-controlling Party shall cooperate and join if required for standing.
  (d) Recoveries: reimburse costs first; remainder split [________________________________].

9.4 Marking. Licensee shall mark Products with applicable patent numbers (35 U.S.C. § 287), trademark symbols (® for federal registrations; ™ for state/unregistered), and copyright notices (17 U.S.C. § 401).

10. TRADE SECRET PROTECTION UNDER TUTSA

10.1 Identification. Trade secrets within the Licensed IP are identified in Schedule 1. The Parties acknowledge that TUTSA protects information that: (a) derives independent economic value from secrecy; and (b) is the subject of reasonable efforts to maintain secrecy (§ 134A.002(6)).

10.2 Reasonable Measures. Both Parties shall implement and maintain reasonable measures to protect Trade Secrets, including:

☐ Restricting access to need-to-know personnel
☐ Requiring written confidentiality agreements from all personnel with access
☐ Implementing physical and electronic security controls
☐ Marking Trade Secret materials as "CONFIDENTIAL — TRADE SECRET"
☐ Conducting periodic access reviews

10.3 TUTSA Remedies. The Parties acknowledge that TUTSA provides:

(a) Injunctive relief (§ 134A.003) — courts may enjoin actual or threatened misappropriation; in exceptional circumstances, condition continued use on reasonable royalty payment;
(b) Damages (§ 134A.004(a)) — actual loss plus unjust enrichment, or a reasonable royalty in lieu;
(c) Exemplary damages (§ 134A.004(b)) — up to 2x the damages award for willful and malicious misappropriation proved by clear and convincing evidence; and
(d) Attorney's fees (§ 134A.005) — for willful/malicious misappropriation or bad-faith claims.

10.4 Statute of Limitations. TUTSA claims must be brought within three (3) years of discovery (§ 134A.006).

10.5 Federal Defend Trade Secrets Act. Nothing herein waives either Party's rights under the federal DTSA (18 U.S.C. § 1836), including the right to seek ex parte seizure in extraordinary circumstances.

11. CONFIDENTIALITY

11.1 Obligations. The receiving Party shall: (a) use Confidential Information solely for this Agreement; (b) protect it with reasonable care; and (c) limit disclosure to bound personnel.

11.2 Exclusions. Public information, prior knowledge, independent development, and third-party receipt without restriction.

11.3 Compelled Disclosure. Permitted by court order with prompt notice and cooperation for protective treatment.

11.4 Duration. Confidentiality obligations survive for [____] years after termination, except Trade Secret obligations survive as long as the information qualifies as a Trade Secret.

12. QUALITY CONTROL (TRADEMARK COMPONENTS)

12.1 Obligation. To the extent the Licensed IP includes trademarks, Licensee shall comply with Licensor's quality standards in Schedule 3. The Parties acknowledge that failure to exercise quality control may result in abandonment of trademark rights.

12.2 Inspection. Licensor may inspect Products and marketing materials on [____] business days' notice. Immediate inspection permitted if consumer safety or DTPA exposure is at issue.

12.3 Corrective Action. Non-conforming Products: written notice, [____]-day cure. Failure to cure is a material breach.

13. REPRESENTATIONS AND WARRANTIES

13.1 Mutual. Each Party represents:

(a) duly organized, in good standing, Texas franchise tax current;
(b) full authority; binding agreement;
(c) no conflicting obligations; and
(d) registered with Texas Secretary of State if required.

13.2 Licensor. Licensor represents:

(a) owns or has sufficient rights to grant the license;
(b) Licensed IP registrations in Schedule 1 are in good standing;
(c) no inconsistent licenses granted;
(d) no known infringement of third-party rights; and
(e) no pending claims against the Licensed IP.

13.3 Licensee. Licensee represents:

(a) possesses expertise to exploit Licensed IP lawfully;
(b) will not infringe third-party rights; and
(c) no DTPA enforcement actions in preceding five years.

13.4 Disclaimer. EXCEPT AS EXPRESSLY STATED, NO WARRANTIES — EXPRESS, IMPLIED, OR STATUTORY — INCLUDING MERCHANTABILITY, FITNESS, TITLE, OR NON-INFRINGEMENT. For software components, disclaimers must comply with UCC § 2.316 (conspicuous; mention "merchantability").

13.5 Survival. [____] years after termination.

14. TEXAS NON-COMPETE AND RESTRICTIVE COVENANT COMPLIANCE

14.1 Enforceability Standard. Any non-compete in this Agreement or a related agreement must meet Tex. Bus. & Com. Code § 15.50:

(a) Ancillary: Must be ancillary to or part of an otherwise enforceable agreement;
(b) Reasonable: Must contain reasonable limitations as to time, geographic area, and scope; and
(c) Not Greater Than Necessary: Must not impose a restraint greater than necessary to protect goodwill or a legitimate business interest.

14.2 Reformation. Under § 15.51(c), a Texas court may reform an overbroad covenant rather than strike it entirely.

14.3 Consideration. The Parties acknowledge Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011): access to confidential information, specialized training, or stock/equity grants may satisfy the ancillary agreement requirement.

14.4 Non-Compete Terms (If Applicable).

☐ Licensee shall not compete in the Field of Use within the Territory for [____] months after termination.
☐ Licensee shall not solicit Licensor's customers or employees for [____] months after termination.
☐ No non-compete or non-solicitation restrictions apply.

15. DTPA COMPLIANCE

15.1 Scope. The DTPA protects "consumers" broadly defined (§ 17.45(4)). IP licensing transactions may fall within scope.

15.2 Prohibited Conduct. Neither Party shall misrepresent characteristics, quality, or origin of the Licensed IP or Products, or engage in unconscionable acts (§ 17.50(a)(3)).

15.3 Damages. Knowing violation: up to 3x economic damages (§ 17.50(b)(1)). Intentional violation: 3x mental anguish damages. Attorney's fees recoverable.

15.4 Business Consumer Waiver. Licensee with assets/net worth >$25M may waive DTPA under § 17.49(f) via separate writing.

16. INDEMNIFICATION

16.1 Licensor IP Indemnity. Licensor defends and indemnifies Licensee against third-party IP claims within the Territory, except for: (a) unauthorized modifications; (b) unauthorized combinations; (c) use outside Field/Territory; or (d) use contrary to this Agreement.

16.2 Mitigation. Licensor may: (a) procure rights; (b) modify/replace; or (c) terminate and refund unused prepaid fees.

16.3 Licensee Indemnity. Licensee indemnifies Licensor for: (a) breach; (b) gross negligence/willful misconduct; (c) product liability; and (d) DTPA claims from Licensee's conduct.

16.4 Procedure. Prompt notice, indemnifying Party controls defense, cooperation at indemnifying Party's expense. Late notice relieves only to extent of prejudice.

17. LIMITATION OF LIABILITY

17.1 Consequential Damages. EXCLUDED except for: (i) gross negligence/willful misconduct; (ii) breach of confidentiality/use restrictions; (iii) indemnification obligations.

17.2 No Cap for IP Breach. No aggregate cap for IP ownership breaches or unauthorized use.

17.3 DTPA and TUTSA Preserved. Contractual limitations do not cap DTPA treble damages or TUTSA exemplary damages where a Texas court holds them applicable.

18. TERM, TERMINATION, AND WIND-DOWN

18.1 Term. Commences on the Effective Date; continues for [________________________________] unless earlier terminated.

18.2 Termination for Cause. Material breach uncured within [____] days (monetary) / [____] days (non-monetary) of written notice.

18.3 Termination for Insolvency. Immediate upon insolvency, bankruptcy filing, or assignment for creditors.

18.4 Effect of Termination.

(a) All licenses terminate; cease use of Licensed IP;
(b) Return or destroy all embodiments; certify within [____] days;
(c) Final royalty report and payment within [____] days;
(d) Sell-off: [____] days for existing conforming inventory, with continued royalty/quality obligations;
(e) Remove Licensed IP references from digital properties within [____] days; and
(f) Surviving Sections: 2, 5 (accrued), 6, 8, 10, 11, 13–17, 19–20.

19. DEFAULT AND REMEDIES UNDER TEXAS LAW

19.1 Events of Default. (a) Non-payment; (b) confidentiality/IP breach; (c) material breach of covenant/warranty; (d) insolvency; (e) DTPA violation in connection with Licensed IP.

19.2 Cure. Written notice specifying default. [____] days for monetary; [____] days for non-monetary.

19.3 Remedies. Non-defaulting Party may:

(a) suspend performance;
(b) accelerate amounts due;
(c) seek injunctive relief without bond for IP/Trade Secret violations;
(d) terminate under § 18.2; and
(e) pursue all remedies at law or equity.

19.4 Attorney's Fees. Prevailing Party recovers reasonable fees under Tex. Civ. Prac. & Rem. Code § 38.001. Presentment required thirty (30) days before suit (§ 38.002).

19.5 Statutes of Limitations.

20. DISPUTE RESOLUTION — VENUE, JURISDICTION, JURY WAIVER

20.1 Governing Law. Texas law (state claims). Federal law for federal IP claims.

20.2 Jurisdiction. Exclusive: Texas District Court, [________________________________] County, Texas, or United States District Court for the [________________________________] District of Texas.

20.3 Venue. [________________________________] County, Texas. Mandatory venue under Tex. Civ. Prac. & Rem. Code Ch. 15 controls if in conflict.

20.4 Jury Waiver. EACH PARTY WAIVES JURY TRIAL TO THE FULLEST EXTENT PERMITTED BY TEXAS LAW.

20.5 Injunctive Relief. Available in any Texas court for IP/Trade Secret/Confidentiality protection without bond.

20.6 ADR (Optional).

☐ Binding arbitration: [________________________________], Texas. Administered by [________________________________] under commercial rules. Judgment entered in any Texas court.

☐ Pre-suit mediation: [________________________________], Texas. Up to sixty (60) days.

☐ No ADR.

21. FORCE MAJEURE

Performance excused (except payment) during events beyond reasonable control. Prompt notice required. Sixty (60) day termination right if event persists.

22. GENERAL PROVISIONS

22.1 Entire Agreement. This Agreement and Schedules are the complete agreement.

22.2 Amendment. Written, signed by both Parties.

22.3 Assignment. With consent, except to Affiliates or successors in merger/acquisition/asset sale.

22.4 Severability. Reform to minimum extent; remainder in force.

22.5 Notices. Written; effective upon receipt via personal delivery, overnight courier, certified mail, or confirmed email.

22.6 Electronic Signatures. Valid under Tex. Bus. & Com. Code Ch. 322 (Texas UETA).

22.7 Counterparts. Each an original; all together one instrument.

22.8 No Waiver. No implied waivers.

22.9 Construction. No drafter presumption. "Including" = "including without limitation."

22.10 Independent Contractors. No agency, partnership, or JV.

23. EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

LICENSOR:

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

LICENSEE:

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

24. SCHEDULE 1 — LICENSED IP REGISTER

25. SCHEDULE 2 — ROYALTY CALCULATIONS AND PAYMENT SCHEDULE

Royalty Rate: [____]% of Net Revenue

Payment Schedule:

Milestones:

26. SCHEDULE 3 — QUALITY STANDARDS (TRADEMARK COMPONENTS)

Applicable only if the Licensed IP includes trademarks:

☐ All Products must meet minimum specifications: [________________________________]

☐ All packaging and marketing must follow Licensor's brand guidelines version [____]

☐ Pre-approval required for all new uses per Section 12.2

☐ Consumer protection compliance (DTPA) verified annually

☐ Product liability insurance maintained: $[________________________________] per occurrence

☐ Annual quality audit by Licensor or designated third party

Sources and References

• Tex. Civ. Prac. & Rem. Code Ch. 134A — TUTSA
• Tex. Bus. & Com. Code § 17.41 et seq. — DTPA
• Tex. Bus. & Com. Code Ch. 16 — Trademark Act
• Tex. Bus. & Com. Code § 15.50 — Non-Compete
• Tex. Civ. Prac. & Rem. Code § 38.001 — Attorney's Fees
• Tex. Civ. Prac. & Rem. Code § 16.004 — Four-Year SOL
• Tex. Fin. Code § 302.001 — Usury
• Tex. Fin. Code § 304.003 — Prejudgment Interest
• Tex. Tax Code § 151.009 — Software Tangible Property
• Tex. Tax Code Ch. 171 — Franchise Tax
• Tex. Bus. & Com. Code Ch. 503 — TDPSA
• Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011)
• Texas Comptroller — Buying an Existing Business
• 18 U.S.C. § 1836 — Defend Trade Secrets Act

This document is a template only. It does not constitute legal advice and should not be used without review by a licensed Texas attorney familiar with the specific IP portfolio and transaction.

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