Non-Exclusive Intellectual Property License Agreement - Alabama

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JURISDICTION: Alabama
LAST UPDATED: 2026-03-18
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NON-EXCLUSIVE INTELLECTUAL PROPERTY LICENSE AGREEMENT

STATE OF ALABAMA

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

LICENSOR:
Name: [________________________________]
Address: [________________________________]
City: [________________________________], Alabama [____]
Entity Type: ☐ Corporation ☐ LLC ☐ Partnership ☐ Sole Proprietor ☐ Other: [____]
Alabama Entity ID: [________________________________]

LICENSEE:
Name: [________________________________]
Address: [________________________________]
City: [________________________________], State: [____] ZIP: [____]
Entity Type: ☐ Corporation ☐ LLC ☐ Partnership ☐ Sole Proprietor ☐ Other: [____]

Licensor and Licensee are each a "Party" and collectively the "Parties."

TABLE OF CONTENTS

1. Definitions
2. Grant of Non-Exclusive License
3. Field of Use and Territory
4. Restrictions on Use
5. Compensation and Royalties
6. Accounting, Reports, and Audit Rights
7. Intellectual Property Ownership
8. Improvements and Derivative Works
9. Quality Control
10. Representations and Warranties
11. Indemnification
12. Limitation of Liability
13. Confidentiality and Trade Secret Protection
14. Term and Renewal
15. Termination
16. Effects of Termination
17. Infringement by Third Parties
18. Insurance
19. Dispute Resolution and Governing Law
20. Miscellaneous Provisions
21. Schedules

ARTICLE 1: DEFINITIONS

1.1 "Confidential Information" means all non-public information disclosed by either Party relating to this Agreement, the Licensed IP, or the disclosing Party's business, including trade secrets as defined under the Alabama Trade Secrets Act (Ala. Code § 8-27-2) and the Defend Trade Secrets Act (18 U.S.C. § 1836).

1.2 "Derivative Works" means any work based upon the Licensed IP, as defined under 17 U.S.C. § 101.

1.3 "Field of Use" means the specific application, industry, or market segment described in Schedule A, Section 2.

1.4 "Licensed Copyrights" means the copyrighted works identified in Schedule A, Section 1(b), protected under 17 U.S.C. §§ 101-810.

1.5 "Licensed IP" means, collectively, the Licensed Patents, Licensed Copyrights, Licensed Marks, and Licensed Trade Secrets described in Schedule A.

1.6 "Licensed Marks" means the trademarks, service marks, and trade dress identified in Schedule A, Section 1(c), protected under 15 U.S.C. §§ 1051-1141 and Alabama common law trademark protections.

1.7 "Licensed Patents" means the patents and patent applications identified in Schedule A, Section 1(a), under 35 U.S.C. §§ 1-390.

1.8 "Licensed Trade Secrets" means the trade secrets identified in Schedule A, Section 1(d), protected under Ala. Code §§ 8-27-1 through 8-27-6 and 18 U.S.C. § 1836.

1.9 "Misappropriation" has the meaning given in Ala. Code § 8-27-2, including acquisition by improper means, or disclosure or use without express or implied consent.

1.10 "Net Revenue" means gross revenue from Licensee's commercial exploitation of the Licensed IP, less: (a) actual returns and allowances; (b) trade and quantity discounts actually granted; (c) applicable sales, use, and value-added taxes paid; and (d) outbound transportation charges separately billed.

1.11 "Territory" means the geographic area described in Schedule A, Section 3.

ARTICLE 2: GRANT OF NON-EXCLUSIVE LICENSE

2.1 License Grant. Subject to the terms of this Agreement, Licensor grants Licensee a non-exclusive, non-transferable license to use, reproduce, display, perform, make, have made, sell, offer to sell, and import the Licensed IP within the Field of Use and Territory during the Term.

2.2 Non-Exclusive Nature. This license is non-exclusive. Licensor retains the unrestricted right to: (a) use the Licensed IP itself; (b) grant licenses to third parties; and (c) assign or transfer the Licensed IP.

2.3 Sublicensing.

☐ Licensee shall NOT have sublicensing rights.

☐ Licensee may grant sublicenses subject to: (a) written sublicense agreements consistent with this Agreement; (b) notice to Licensor within [____] business days; (c) Licensee remaining responsible for sublicensee acts; and (d) automatic termination of sublicenses upon termination of this Agreement.

2.4 Reservation of Rights. All rights not expressly granted are reserved to Licensor.

ARTICLE 3: FIELD OF USE AND TERRITORY

3.1 Field of Use. Licensee shall use Licensed IP solely within the Field of Use in Schedule A, Section 2.

3.2 Territory. Licensee shall exploit Licensed IP solely within the Territory in Schedule A, Section 3.

3.3 No Exclusivity. Licensor may license others within the same Field of Use and Territory without limitation.

ARTICLE 4: RESTRICTIONS ON USE

4.1 Licensee shall NOT:

(a) Use Licensed IP outside the Field of Use or Territory;

(b) Reverse engineer, decompile, or disassemble Licensed IP except as permitted by applicable law;

(c) Remove or alter proprietary notices on Licensed IP;

(d) Use Licensed IP unlawfully or in a manner infringing third-party rights;

(e) Assign or transfer Licensed IP without authorization;

(f) Use Licensed Marks in a manner that tarnishes or dilutes them (15 U.S.C. § 1125(c));

(g) Export Licensed IP in violation of Export Administration Regulations (15 C.F.R. §§ 730-774) or OFAC sanctions (31 C.F.R. Part 500);

(h) Engage in any act that would constitute misappropriation under Ala. Code § 8-27-2 or 18 U.S.C. § 1836.

4.2 Alabama Deceptive Trade Practices. Licensee shall not use the Licensed IP in any manner that constitutes a deceptive trade practice under the Alabama Deceptive Trade Practices Act (Ala. Code §§ 8-19-1 et seq.), including false advertising, misleading representations, or passing off.

4.3 Compliance with Law. Licensee shall comply with all applicable federal, Alabama state, and local laws in connection with its use of the Licensed IP.

ARTICLE 5: COMPENSATION AND ROYALTIES

5.1 Compensation Structure (select applicable):

☐ Upfront License Fee: $[________________________________] due within [____] days of the Effective Date.

☐ Running Royalty: [____]% of Net Revenue, payable quarterly within [____] days after each calendar quarter.

☐ Minimum Annual Royalty: $[________________________________] per contract year.

☐ Per-Unit Royalty: $[____] per unit manufactured, sold, or distributed.

☐ Combination: As detailed in Schedule B.

5.2 Payment Terms. All payments in U.S. Dollars by wire transfer. Late payments bear interest at the lesser of [____]% per month or the maximum rate permitted under Alabama law.

5.3 Taxes. All amounts are exclusive of taxes. Licensee is responsible for applicable Alabama sales and use taxes (Ala. Code § 40-23-1 et seq.) and any other taxes imposed on payments.

5.4 No Set-Off. Licensee shall not set off amounts except as required by tax law under Section 5.3.

ARTICLE 6: ACCOUNTING, REPORTS, AND AUDIT RIGHTS

6.1 Royalty Reports. Within [____] days after each calendar quarter, Licensee shall deliver a written report setting forth: (a) quantity of Licensed Products manufactured, sold, and distributed; (b) gross revenue and Net Revenue by product and Territory; (c) royalty calculation; and (d) permitted deductions.

6.2 Books and Records. Licensee shall maintain complete books and records in accordance with GAAP for not less than [____] years.

6.3 Audit Rights. Licensor may audit Licensee's records up to [____] time(s) per calendar year upon [____] days' prior written notice, by an independent CPA.

6.4 Audit Costs. Licensor bears audit costs unless an underpayment exceeding [____]% is found, in which case Licensee bears costs. Underpayments due within [____] days with interest.

ARTICLE 7: INTELLECTUAL PROPERTY OWNERSHIP

7.1 Licensor Ownership. Licensor retains sole ownership of all Licensed IP, including patent rights (35 U.S.C.), copyrights (17 U.S.C.), trademark rights (15 U.S.C.), and trade secret rights (Ala. Code §§ 8-27-1 to 8-27-6; 18 U.S.C. § 1836).

7.2 No Challenge. Licensee shall not challenge the validity, enforceability, or ownership of Licensed IP.

7.3 Goodwill. All goodwill from use of Licensed Marks inures to Licensor.

7.4 Prosecution. Licensor controls prosecution and maintenance of Licensed IP registrations.

ARTICLE 8: IMPROVEMENTS AND DERIVATIVE WORKS

8.1 Ownership (select one):

☐ Option A -- Licensor Owns All: Licensee assigns all Improvements to Licensor.

☐ Option B -- Licensee Owns with License-Back: Licensee owns its Improvements and grants Licensor a perpetual, royalty-free, non-exclusive license.

☐ Option C -- Joint Ownership: Improvements jointly owned, each Party may exploit without accounting to the other.

8.2 Disclosure. Licensee shall promptly disclose all Improvements created during the Term.

8.3 Cooperation. Parties shall execute documents necessary to perfect rights under this Article.

ARTICLE 9: QUALITY CONTROL

9.1 Quality Standards. Products and services using Licensed Marks shall meet Quality Standards in Schedule C.

9.2 Samples and Inspection. Licensee shall provide samples upon request and permit premises inspection on reasonable notice.

9.3 Trademark Usage. Licensee shall follow trademark usage guidelines, use proper notices ((R) or TM), and attribute ownership to Licensor.

9.4 Cure Period. Licensee has [____] days to cure quality deficiencies after written notice. Failure permits Licensor to suspend affected Mark usage.

ARTICLE 10: REPRESENTATIONS AND WARRANTIES

10.1 Licensor Warranties. Licensor represents and warrants:

(a) Full right and authority to grant the license;

(b) No knowledge, after reasonable inquiry, that Licensed IP infringes third-party rights within the Field of Use and Territory;

(c) No pending or, to Licensor's knowledge, threatened claims challenging the Licensed IP;

(d) No prior exclusive grants conflicting with this license for the Field of Use and Territory.

10.2 Licensee Warranties. Licensee represents and warrants:

(a) Authority to enter into and perform this Agreement;

(b) Compliance with all applicable laws, including Alabama law;

(c) No use of Licensed IP in a manner harmful to Licensor's reputation or that violates Ala. Code §§ 8-19-1 et seq.

10.3 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE, THE LICENSED IP IS PROVIDED "AS IS." LICENSOR MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

ARTICLE 11: INDEMNIFICATION

11.1 Licensor Indemnification. Licensor indemnifies Licensee from third-party claims arising from: (a) actual infringement by Licensed IP as provided; or (b) Licensor's breach of warranties.

11.2 Exclusions. No Licensor indemnity for claims from: (a) Licensee's modification; (b) combination with non-Licensor materials; (c) use outside scope; or (d) continued use after infringement notice.

11.3 Licensee Indemnification. Licensee indemnifies Licensor from claims arising from: (a) use outside scope; (b) breach of this Agreement; or (c) Licensee's products or services using Licensed IP.

11.4 Procedures. Prompt notice, sole defense control to indemnifying Party, reasonable cooperation at indemnifying Party's expense.

ARTICLE 12: LIMITATION OF LIABILITY

12.1 Consequential Damages Exclusion. EXCEPT FOR BREACHES OF ARTICLES 4, 7, 11, OR 13, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES.

12.2 Liability Cap. EXCEPT FOR BREACHES OF ARTICLES 4, 7, 11, OR 13, EACH PARTY'S AGGREGATE LIABILITY SHALL NOT EXCEED THE GREATER OF: (A) FEES AND ROYALTIES PAID OR PAYABLE DURING THE [____]-MONTH PERIOD PRECEDING THE EVENT; OR (B) $[________________________________].

ARTICLE 13: CONFIDENTIALITY AND TRADE SECRET PROTECTION

13.1 Alabama Trade Secrets Act. The Parties acknowledge that certain Confidential Information constitutes trade secrets protected under the Alabama Trade Secrets Act (Ala. Code §§ 8-27-1 through 8-27-6). The Alabama Trade Secrets Act provides that:

(a) A court may enjoin actual or threatened misappropriation (Ala. Code § 8-27-3);

(b) Damages may include both actual loss caused by misappropriation and unjust enrichment (Ala. Code § 8-27-3);

(c) Willful and malicious misappropriation may result in exemplary damages not exceeding twice the compensatory award (Ala. Code § 8-27-3);

(d) The statute of limitations for misappropriation claims is two (2) years from discovery (Ala. Code § 8-27-5).

13.2 Confidentiality Obligations. Each Party shall: (a) maintain the other's Confidential Information in strict confidence; (b) disclose only to personnel bound by confidentiality obligations; and (c) use Confidential Information solely for performing under this Agreement.

13.3 Exclusions. Information that is publicly available (without fault of receiving Party), previously known, independently developed, or received from a third party without restriction is excluded.

13.4 Required Disclosures. Disclosure permitted if required by law or court order, with prompt notice and cooperation to obtain a protective order.

13.5 Federal Trade Secret Protection. The Parties acknowledge additional protection under the Defend Trade Secrets Act (18 U.S.C. § 1836), which provides a federal civil cause of action for trade secret misappropriation.

13.6 DTSA Notice. Pursuant to 18 U.S.C. § 1833(b), an individual shall not be held liable under any federal or state trade secret law for disclosing a trade secret in confidence to a government official or attorney solely for reporting or investigating a suspected law violation, or in a sealed court filing.

13.7 Reasonable Measures. Both Parties shall implement reasonable measures to maintain the secrecy of trade secret information, consistent with the requirements of Ala. Code § 8-27-2 (requiring "efforts that are reasonable under the circumstances to maintain its secrecy").

13.8 Duration. Confidentiality obligations survive for [____] years after termination; trade secret obligations continue as long as the information remains a trade secret under Alabama law.

ARTICLE 14: TERM AND RENEWAL

14.1 Initial Term. This Agreement commences on the Effective Date and continues for [____] years.

14.2 Renewal:

☐ Automatically terminates without renewal.

☐ Automatically renews for successive [____]-year terms unless [____] days' written notice of non-renewal.

☐ Renewable only by mutual written agreement.

14.3 Patent Expiration. License to Licensed Patents expires upon patent expiration; no post-expiration royalties per Brulotte v. Thys Co., 379 U.S. 29 (1964).

ARTICLE 15: TERMINATION

15.1 For Cause. Either Party may terminate if the other materially breaches and fails to cure within [____] days of written notice, becomes insolvent or files for bankruptcy, or ceases business operations.

15.2 For Non-Payment. Licensor may terminate upon [____] days' notice for failure to pay.

15.3 For Convenience:

☐ Either Party may terminate upon [____] days' notice.

☐ Not applicable.

15.4 For Quality Failure. Licensor may terminate for repeated quality failures after notice and cure.

ARTICLE 16: EFFECTS OF TERMINATION

16.1 Cessation. Licensee shall immediately cease all use of Licensed IP.

16.2 Return or Destruction. Within [____] days, return or destroy all Licensed IP materials and certify in writing.

16.3 Sell-Off Period. [____]-day sell-off period for existing inventory, with continued royalty payments.

16.4 Final Accounting. Final royalty report and payment within [____] days of termination.

16.5 Survival. Articles 1, 7, 8 (accrued rights), 10.3, 11, 12, 13, 16, and 19 survive.

ARTICLE 17: INFRINGEMENT BY THIRD PARTIES

17.1 Notice. Prompt notice to other Party of known or suspected third-party infringement.

17.2 Enforcement. Licensor has first right to enforce. If Licensor declines within [____] days, Licensee may request permission to enforce in Licensor's name.

17.3 Recoveries. First to reimburse enforcing Party's costs; remainder split [____]% Licensor / [____]% Licensee.

ARTICLE 18: INSURANCE

18.1 Licensee shall maintain during the Term:

(a) Commercial general liability: $[________________________________] per occurrence / $[________________________________] aggregate;

(b) Product liability (if applicable): $[________________________________] per occurrence.

18.2 Licensor named as additional insured; certificates upon request.

ARTICLE 19: DISPUTE RESOLUTION AND GOVERNING LAW

19.1 Governing Law. This Agreement is governed by the laws of the State of Alabama, without regard to conflict-of-laws principles.

19.2 Escalation. Disputes shall first be referred to senior executives for [____] days of good-faith negotiation.

19.3 Dispute Resolution (select one):

☐ Litigation: Exclusive jurisdiction in state and federal courts located in [________________________________] County, Alabama. Each Party waives objections to venue and personal jurisdiction.

☐ Arbitration: Binding arbitration administered by [________________________________] (e.g., AAA, JAMS) under its current rules, with [____] arbitrator(s) seated in [________________________________], Alabama. The arbitrator(s) may award any remedy available under applicable law.

19.4 Jury Waiver. TO THE FULLEST EXTENT PERMITTED UNDER ALABAMA LAW, EACH PARTY IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING UNDER THIS AGREEMENT.

19.5 Injunctive Relief. Either Party may seek injunctive relief from any Alabama court of competent jurisdiction to prevent irreparable harm, including unauthorized use of Licensed IP or misappropriation of trade secrets under Ala. Code § 8-27-3.

19.6 Prevailing Party. The prevailing Party shall recover reasonable attorneys' fees and costs. Alabama follows the "American Rule" for attorneys' fees but enforces contractual fee-shifting provisions.

ARTICLE 20: MISCELLANEOUS PROVISIONS

20.1 Entire Agreement. This Agreement, including Schedules, constitutes the entire agreement.

20.2 Assignment. Licensee shall not assign without Licensor's prior written consent. Licensor may assign freely.

20.3 Notices. Written notices effective upon: personal delivery; one (1) business day after overnight courier; or three (3) business days after certified mail, return receipt requested.

20.4 Force Majeure. Non-performance excused for events beyond reasonable control (excluding payment obligations).

20.5 Waiver. Waivers must be in writing.

20.6 Severability. Invalid provisions modified to minimum extent; remaining provisions remain effective.

20.7 Amendments. Written instrument signed by both Parties required.

20.8 Counterparts. May be executed in counterparts. Electronic signatures binding under the Alabama Uniform Electronic Transactions Act (Ala. Code §§ 8-1A-1 et seq.).

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

ARTICLE 21: SCHEDULES

Schedule A: Licensed IP Description, Field of Use, and Territory

• Section 1(a): Licensed Patents
• Section 1(b): Licensed Copyrights
• Section 1(c): Licensed Marks
• Section 1(d): Licensed Trade Secrets
• Section 2: Field of Use
• Section 3: Territory

Schedule B: Compensation, Royalty Rates, and Payment Terms

Schedule C: Quality Standards and Trademark Usage Guidelines

Schedule D: Form of Royalty Report

SIGNATURES

LICENSOR:

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

LICENSEE:

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

SOURCES AND REFERENCES

• Alabama Trade Secrets Act, Ala. Code §§ 8-27-1 through 8-27-6
• Alabama Deceptive Trade Practices Act, Ala. Code §§ 8-19-1 et seq.
• Alabama interest rate provisions, Ala. Code §§ 8-8-1, 8-8-5
• Alabama Arbitration Act, Ala. Code §§ 6-6-1 et seq.
• Alabama Uniform Electronic Transactions Act, Ala. Code §§ 8-1A-1 et seq.
• Alabama foreign entity registration, Ala. Code § 10A-1-7.21
• Copyright Act, 17 U.S.C. §§ 101-810
• Patent Act, 35 U.S.C. §§ 1-390
• Lanham Act, 15 U.S.C. §§ 1051-1141
• Defend Trade Secrets Act, 18 U.S.C. §§ 1831-1839
• Brulotte v. Thys Co., 379 U.S. 29 (1964)
• Lear, Inc. v. Adkins, 395 U.S. 653 (1969)
• Ex parte Thicklin, 824 So. 2d 723 (Ala. 2002)
• Ex parte Cupps, 782 So. 2d 772 (Ala. 2000)
• Cherry, Bekaert & Holland v. Brown, 582 So. 2d 502 (Ala. 1991)
• Lloyd Wood Coal Co. v. Clark Equip. Co., 543 So. 2d 671 (Ala. 1989)