Non-Exclusive Intellectual Property License Agreement - Texas

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

STATE OF TEXAS

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

LICENSOR:
Name: [________________________________]
Address: [________________________________]
City: [________________________________], Texas [____]
Entity Type: ☐ Corporation ☐ LLC ☐ Partnership ☐ Sole Proprietor ☐ Other: [____]
Texas SOS File Number: [________________________________]

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. Texas-Specific Provisions
21. Miscellaneous Provisions
22. Schedules

ARTICLE 1: DEFINITIONS

1.1 "Confidential Information" means non-public information disclosed by either Party, including trade secrets as defined under TUTSA (Tex. Civ. Prac. & Rem. Code § 134A.002) and the Defend Trade Secrets Act (18 U.S.C. § 1836).

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

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

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

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

1.6 "Licensed Marks" means trademarks in Schedule A, Section 1(c), under 15 U.S.C. §§ 1051-1141, the Texas trademark registration statute (Tex. Bus. & Com. Code Ch. 16), and Texas common law.

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

1.8 "Licensed Trade Secrets" means trade secrets in Schedule A, Section 1(d), protected under Tex. Civ. Prac. & Rem. Code Ch. 134A and 18 U.S.C. § 1836.

1.9 "Net Revenue" means gross revenue from exploitation of Licensed IP, less: (a) returns; (b) discounts; (c) Texas sales tax and other applicable taxes; and (d) transportation charges billed separately.

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

ARTICLE 2: GRANT OF NON-EXCLUSIVE LICENSE

2.1 License Grant. 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. Licensor retains rights to: (a) use Licensed IP; (b) grant other licenses; and (c) assign or transfer Licensed IP.

2.3 Sublicensing:

☐ No sublicensing rights.

☐ Sublicensing permitted subject to: written agreements; notice within [____] days; Licensee responsible for sublicensees; automatic termination.

2.4 Reservation. All rights not expressly granted are reserved.

ARTICLE 3: FIELD OF USE AND TERRITORY

3.1 Field of Use. Use solely within Field of Use.

3.2 Territory. Exploit solely within Territory.

3.3 No Exclusivity. Licensor may license others without limitation.

ARTICLE 4: RESTRICTIONS ON USE

4.1 Licensee shall NOT:

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

(b) Reverse engineer except as permitted by applicable law;

(c) Remove proprietary notices;

(d) Use Licensed IP unlawfully or to infringe third-party rights;

(e) Assign or transfer without authorization;

(f) Tarnish or dilute Licensed Marks (15 U.S.C. § 1125(c));

(g) Export in violation of EAR or OFAC sanctions;

(h) Engage in misappropriation under Tex. Civ. Prac. & Rem. Code § 134A.002(3) or 18 U.S.C. § 1836.

4.2 Texas Deceptive Trade Practices. Licensee shall not use Licensed IP in a manner constituting a deceptive trade practice under the Texas Deceptive Trade Practices-Consumer Protection Act (Tex. Bus. & Com. Code §§ 17.41-17.63).

4.3 Compliance. Licensee shall comply with all applicable federal, Texas, and local laws.

ARTICLE 5: COMPENSATION AND ROYALTIES

5.1 Compensation (select applicable):

☐ Upfront Fee: $[________________________________] due within [____] days.

☐ Running Royalty: [____]% of Net Revenue, quarterly within [____] days.

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

☐ Per-Unit Royalty: $[____] per unit.

☐ Combination: Per Schedule B.

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

5.3 Taxes. All amounts exclusive of taxes. Licensee responsible for Texas sales and use tax (Tex. Tax Code Ch. 151) and any applicable local taxes.

5.4 No Set-Off. No set-off except as required by tax law.

ARTICLE 6: ACCOUNTING, REPORTS, AND AUDIT RIGHTS

6.1 Reports. Quarterly within [____] days: quantity, gross and Net Revenue, royalty calculation, deductions.

6.2 Records. GAAP-compliant for [____] years.

6.3 Audit. Up to [____] time(s) per year on [____] days' notice by independent CPA.

6.4 Costs. Licensor bears costs unless underpayment exceeds [____]%, then Licensee bears. Underpayments paid within [____] days with interest.

ARTICLE 7: INTELLECTUAL PROPERTY OWNERSHIP

7.1 Licensor Ownership. Licensor retains sole ownership under federal law, TUTSA (Tex. Civ. Prac. & Rem. Code Ch. 134A), and Tex. Bus. & Com. Code Ch. 16.

7.2 No Challenge. Licensee shall not challenge Licensed IP validity or ownership.

7.3 Goodwill. Goodwill from Licensed Marks inures to Licensor.

7.4 Prosecution. Licensor controls prosecution and maintenance.

ARTICLE 8: IMPROVEMENTS AND DERIVATIVE WORKS

8.1 Ownership (select one):

☐ Option A: Licensee assigns all Improvements to Licensor.

☐ Option B: Licensee owns with perpetual, royalty-free, non-exclusive license-back.

☐ Option C: Jointly owned.

8.2 Disclosure. Prompt disclosure of Improvements during Term.

8.3 Cooperation. Execute documents to perfect rights.

ARTICLE 9: QUALITY CONTROL

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

9.2 Samples. Samples on request; premises inspection on reasonable notice.

9.3 Trademark Usage. Follow guidelines, proper notices, ownership attribution.

9.4 Cure. [____] days to cure after written notice.

ARTICLE 10: REPRESENTATIONS AND WARRANTIES

10.1 Licensor Warranties:

(a) Right and authority to grant the license;

(b) No knowledge of third-party infringement;

(c) No pending or threatened challenges;

(d) No conflicting prior grants.

10.2 Licensee Warranties:

(a) Authority to enter and perform;

(b) Compliance with Texas and federal law;

(c) No deceptive trade practices under Tex. Bus. & Com. Code §§ 17.41-17.63.

10.3 DISCLAIMER. EXCEPT AS IN THIS ARTICLE, LICENSED IP IS "AS IS." NO OTHER WARRANTIES INCLUDING MERCHANTABILITY, FITNESS, OR NON-INFRINGEMENT.

ARTICLE 11: INDEMNIFICATION

11.1 Licensor Indemnification. Claims from: (a) infringement by Licensed IP; or (b) Licensor's breach.

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

11.3 Licensee Indemnification. Claims from: (a) use outside scope; (b) breach; or (c) products/services.

11.4 Procedures. Prompt notice; sole defense control; cooperation.

ARTICLE 12: LIMITATION OF LIABILITY

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

12.2 Cap. AGGREGATE LIABILITY NOT TO EXCEED THE GREATER OF: (A) FEES/ROYALTIES DURING THE [____]-MONTH PERIOD PRECEDING THE EVENT; OR (B) $[________________________________].

ARTICLE 13: CONFIDENTIALITY AND TRADE SECRET PROTECTION

13.1 Texas Uniform Trade Secrets Act (TUTSA). Protection under Tex. Civ. Prac. & Rem. Code Ch. 134A:

(a) TUTSA's trade secret definition is BROADER than the model UTSA, encompassing "all forms and types of information, including business, scientific, technical, economic, or engineering information" (§ 134A.002(6));

(b) Injunctive relief for actual or threatened misappropriation (§ 134A.003);

(c) Damages including actual loss and unjust enrichment; reasonable royalty available as an alternative (§ 134A.004);

(d) Exemplary damages not exceeding twice the compensatory award for willful and malicious misappropriation, proven by clear and convincing evidence (§ 134A.004(b));

(e) Reasonable attorneys' fees if willful and malicious misappropriation or bad-faith claim (§ 134A.005);

(f) Three-year statute of limitations from discovery or when it should have been discovered (§ 134A.006);

(g) TUTSA displaces conflicting tort, restitutionary, and other law, but does not affect contractual remedies, criminal remedies, or other civil remedies not based on trade secret misappropriation (§ 134A.007).

13.2 Obligations. Maintain in strict confidence; disclose only to bound personnel; use solely for Agreement purposes.

13.3 Exclusions. Publicly available, previously known, independently developed, or received from third party without restriction.

13.4 Required Disclosures. Permitted if required by law, with prompt notice and protective order cooperation. Texas Public Information Act (Tex. Gov't Code Ch. 552) exempts trade secrets from disclosure (§ 552.110).

13.5 DTSA. Federal protection under 18 U.S.C. § 1836. DTSA whistleblower immunity per 18 U.S.C. § 1833(b).

13.6 Reasonable Measures. Measures consistent with TUTSA § 134A.002(6)(B) ("subject of efforts that are reasonable under the circumstances to maintain its secrecy").

13.7 Duration. Confidentiality survives [____] years; trade secret obligations continue while qualifying.

ARTICLE 14: TERM AND RENEWAL

14.1 Initial Term. Commences on Effective Date, continues for [____] years.

14.2 Renewal:

☐ Terminates without renewal.

☐ Renews for [____]-year terms unless [____] days' notice.

☐ Renewable by mutual agreement.

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

ARTICLE 15: TERMINATION

15.1 For Cause. Material breach uncured after [____] days; insolvency; cessation of business.

15.2 Non-Payment. [____] days' notice.

15.3 Convenience:

☐ [____] days' notice.

☐ Not applicable.

15.4 Quality Failure. Repeated failures after notice and cure.

ARTICLE 16: EFFECTS OF TERMINATION

16.1 Cessation. Immediately cease use.

16.2 Return/Destruction. Within [____] days; certify in writing.

16.3 Sell-Off. [____]-day period with continued royalties.

16.4 Final Accounting. Within [____] days.

16.5 Survival. Articles 1, 7, 8, 10.3, 11, 12, 13, 16, 19, and 20 survive.

ARTICLE 17: INFRINGEMENT BY THIRD PARTIES

17.1 Notice. Prompt notice of infringement.

17.2 Enforcement. Licensor first right; Licensee may request permission if Licensor declines within [____] days.

17.3 Recoveries. First to reimburse costs; remainder [____]% Licensor / [____]% Licensee.

ARTICLE 18: INSURANCE

18.1 Licensee maintains:

(a) CGL: $[________________________________] per occurrence / $[________________________________] aggregate;

(b) Product liability: $[________________________________];

(c) Workers' compensation per Texas requirements (Tex. Lab. Code Ch. 401 et seq.; note Texas does not mandate workers' compensation for private employers).

18.2 Licensor as additional insured; certificates upon request.

ARTICLE 19: DISPUTE RESOLUTION AND GOVERNING LAW

19.1 Governing Law. Texas law, without regard to conflict-of-laws principles.

19.2 Escalation. Senior executives negotiate for [____] days.

19.3 Resolution (select one):

☐ Litigation: Exclusive jurisdiction in state and federal courts in [________________________________] County, Texas.

☐ Arbitration: Binding arbitration by [________________________________] with [____] arbitrator(s) in [________________________________], Texas, under the Texas General Arbitration Act (Tex. Civ. Prac. & Rem. Code Ch. 171).

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

19.5 Injunctive Relief. Either Party may seek injunctive relief from Texas courts, including for trade secret misappropriation under Tex. Civ. Prac. & Rem. Code § 134A.003.

19.6 Prevailing Party. Prevailing Party recovers reasonable attorneys' fees and costs.

ARTICLE 20: TEXAS-SPECIFIC PROVISIONS

20.1 Covenants Not to Compete. To the extent any provision of this Agreement may be characterized as a covenant not to compete under Texas law, the Parties acknowledge that the Texas Covenants Not to Compete Act (Tex. Bus. & Com. Code § 15.50) governs enforceability. A covenant is enforceable if it is: (a) ancillary to or part of an otherwise enforceable agreement; (b) reasonable in scope (time, geographic area, and scope of activity); and (c) does not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.

20.2 Texas DTPA Waiver. If the aggregate value of this Agreement exceeds $500,000, the Parties may waive DTPA protections as permitted by Tex. Bus. & Com. Code § 17.49(f). Select one:

☐ DTPA Waiver Applies: Licensee acknowledges that the total consideration for this Agreement exceeds $500,000, and to the extent permitted by § 17.49(f), Licensee waives its rights and remedies under the DTPA, subject to the requirements of § 17.49(f).

☐ DTPA Waiver Does Not Apply.

20.3 Texas Theft Liability Act. The Parties acknowledge that misappropriation of trade secrets may give rise to claims under the Texas Theft Liability Act (Tex. Civ. Prac. & Rem. Code Ch. 134), which provides for recovery of damages, court costs, and reasonable attorneys' fees.

20.4 Franchise Tax Considerations. If either Party is subject to the Texas franchise tax (Tex. Tax Code Ch. 171), IP license royalties may affect the computation of taxable margin. Each Party is responsible for its own franchise tax obligations.

ARTICLE 21: MISCELLANEOUS PROVISIONS

21.1 Entire Agreement. This Agreement and Schedules constitute the entire agreement.

21.2 Assignment. Licensee may not assign without consent. Licensor may assign freely.

21.3 Notices. Written; effective on delivery, one (1) business day after courier, three (3) business days after certified mail.

21.4 Force Majeure. Non-performance excused for events beyond reasonable control (not payment). Texas-specific events include hurricanes, tornadoes, and state-declared disasters.

21.5 Waiver. Written waivers only.

21.6 Severability. Invalid provisions modified minimally; others remain.

21.7 Amendments. Written, signed by both Parties.

21.8 Counterparts. Counterparts permitted. Electronic signatures valid under the Texas Uniform Electronic Transactions Act (Tex. Bus. & Com. Code Ch. 322).

21.9 Independent Contractors. No partnership, joint venture, or agency.

ARTICLE 22: SCHEDULES

Schedule A: Licensed IP, Field of Use, Territory

Schedule B: Compensation, Royalty Rates, Payment Terms

Schedule C: Quality Standards and Trademark Guidelines

Schedule D: Form of Royalty Report

SIGNATURES

LICENSOR:

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

LICENSEE:

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

SOURCES AND REFERENCES

• Texas Uniform Trade Secrets Act (TUTSA), Tex. Civ. Prac. & Rem. Code Ch. 134A
• Texas Deceptive Trade Practices Act, Tex. Bus. & Com. Code §§ 17.41-17.63
• Texas Covenants Not to Compete Act, Tex. Bus. & Com. Code § 15.50
• Texas Theft Liability Act, Tex. Civ. Prac. & Rem. Code Ch. 134
• Texas trademark registration, Tex. Bus. & Com. Code Ch. 16
• Texas usury limits, Tex. Fin. Code § 302.001
• Texas judgment interest, Tex. Fin. Code § 304.003
• Texas sales and use tax, Tex. Tax Code Ch. 151
• Texas franchise tax, Tex. Tax Code Ch. 171
• Texas General Arbitration Act, Tex. Civ. Prac. & Rem. Code Ch. 171
• Texas Public Information Act trade secret exemption, Tex. Gov't Code § 552.110
• Texas Uniform Electronic Transactions Act, Tex. Bus. & Com. Code Ch. 322
• Texas Business Organizations Code Ch. 9 (foreign entity registration)
• Texas breach of contract attorneys' fees, Tex. Civ. Prac. & Rem. Code § 38.001
• 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)
• Prudential Ins. Co. v. Jefferson Assocs., 896 S.W.2d 156 (Tex. 1995)
• In re Halliburton Co., 80 S.W.3d 566 (Tex. 2002)
• In re Prudential Ins. Co., 148 S.W.3d 124 (Tex. 2004)
• Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011)
• DeSantis v. Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990)
• Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705 (Tex. 1987)
• Gym-N-I Playgrounds v. Snider, 220 S.W.3d 905 (Tex. 2007)