INTELLECTUAL PROPERTY LICENSE AGREEMENT
(the “Agreement”)
[// GUIDANCE: This template is intentionally comprehensive. Delete provisions that are not applicable and tailor bracketed items before use.]
DOCUMENT HEADER
This Intellectual Property License Agreement (the “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”), by and between [FULL LEGAL NAME OF LICENSOR], a [STATE/COUNTRY] [ENTITY TYPE] with its principal place of business at [LICENSOR ADDRESS] (“Licensor”), and [FULL LEGAL NAME OF LICENSEE], a [STATE/COUNTRY] [ENTITY TYPE] with its principal place of business at [LICENSEE ADDRESS] (“Licensee”). Licensor and Licensee are each referred to herein individually as a “Party” and collectively as the “Parties.”
Recitals
A. Licensor owns or otherwise controls certain intellectual property described herein and is willing to grant a license thereto on the terms and conditions set forth in this Agreement.
B. Licensee desires to obtain, and Licensor is willing to grant, a license to use such intellectual property solely in accordance with the terms of this Agreement and in exchange for the consideration specified herein.
C. The Parties agree that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby constitute good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged.
TABLE OF CONTENTS
- Definitions
- Grant of License
- Consideration & Payment Terms
- Delivery, Support, and Maintenance
- Records; Audit Rights
- Intellectual Property Protection & Enforcement
- Confidentiality
- Representations & Warranties
- Covenants & Restrictions
- Term and Termination
- Default & Remedies
- Indemnification
- Limitation of Liability
- Insurance
- Force Majeure
- Dispute Resolution
- General Provisions
- Execution Block
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings set forth below. All defined terms appear alphabetically.
“Affiliate” means, with respect to a Party, any entity that directly or indirectly controls, is controlled by, or is under common control with such Party.
“Arbitration Rules” means the [SELECT: American Arbitration Association Commercial Arbitration Rules / UNCITRAL Arbitration Rules / Other] in effect on the date the demand for arbitration is filed.
“Documentation” means all user instructions, manuals, technical materials, and any other documents or materials that describe the functions, operation, installation, or use of the Licensed IP.
“Field” means [SPECIFY FIELD OR INDUSTRY].
“Improvement” means any modification, enhancement, derivative work, update, upgrade, or other improvement to the Licensed IP created by or for Licensee.
“Licensed IP” means the intellectual property more fully described in Exhibit A, including all related Documentation, trademarks, trade names, copyrights, patents, designs, trade secrets, know-how, and proprietary information.
“Net Sales” means gross revenues received by Licensee from exploitation of the Licensed IP less [AGREED DEDUCTIONS].
“Royalties” means the royalty payments calculated in accordance with Section 3.2.
“Territory” means [GEOGRAPHIC TERRITORY].
“Term” has the meaning set forth in Section 10.1.
[// GUIDANCE: Add or delete defined terms as needed. Ensure each defined term is capitalized consistently throughout.]
2. GRANT OF LICENSE
2.1 License Grant. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a [SELECT: non-exclusive / exclusive / sole], [SELECT: worldwide / Territory-limited], royalty-bearing license under the Licensed IP to [PERMITTED USES, e.g., make, have made, use, sell, offer for sale, import] within the Field during the Term (the “License”).
2.2 Sublicensing. Licensee may [SELECT: not sublicense / sublicense only with Licensor’s prior written consent / freely sublicense] the rights granted herein, provided that each sublicensee agrees in writing to be bound by terms no less protective of Licensor than those contained in this Agreement.
2.3 Retained Rights. Licensor retains all rights in and to the Licensed IP not expressly granted to Licensee, including the right to exploit the Licensed IP outside the Field and/or Territory, as applicable.
2.4 Reservation of Governmental Rights. Nothing herein shall limit any rights of the United States Government or any foreign governmental entity that arise by operation of applicable law or as a result of funding or other support associated with the creation of the Licensed IP.
3. CONSIDERATION & PAYMENT TERMS
3.1 Up-Front License Fee. In consideration of the License granted, Licensee shall pay Licensor a non-refundable license fee of [AMOUNT & CURRENCY] within [NUMBER] days after the Effective Date.
3.2 Royalties.
(a) During the Term, Licensee shall pay Royalties equal to [PERCENTAGE]% of Net Sales.
(b) Royalties shall accrue upon sale or invoicing, whichever occurs first, and shall be paid quarterly within [NUMBER] days after the end of each calendar quarter.
3.3 Milestone Payments. Licensee shall pay Licensor the milestone amounts set forth in Exhibit B upon achievement of each corresponding milestone.
3.4 Reports; Payment Audit. Concurrent with each Royalty payment, Licensee shall deliver a written report detailing the calculation of Net Sales in form reasonably acceptable to Licensor.
3.5 Late Payments. Any payment not made when due shall bear interest at the lesser of (i) [X]% per month or (ii) the maximum rate permitted by law, compounded monthly.
[// GUIDANCE: Insert tax-gross-up language if payments may be subject to withholding taxes.]
4. DELIVERY, SUPPORT, AND MAINTENANCE
4.1 Delivery. Licensor shall deliver the Licensed IP and Documentation in electronic form within [NUMBER] days after the Effective Date.
4.2 Support. Licensor shall provide [DESCRIBE SUPPORT LEVELS OR “no support obligations”].
4.3 Updates & Upgrades. [Specify whether Updates are included in the License Fee or subject to additional fees.]
5. RECORDS; AUDIT RIGHTS
5.1 Records. Licensee shall maintain complete and accurate records relevant to its obligations under this Agreement for at least [NUMBER] years following the period to which such records relate.
5.2 Audit. Upon [NUMBER] days’ prior written notice, Licensor may audit Licensee’s relevant records no more than [NUMBER] times per calendar year. Licensee shall reimburse Licensor for audit costs if the audit reveals an underpayment of [X]% or more for the audited period.
6. INTELLECTUAL PROPERTY PROTECTION & ENFORCEMENT
6.1 Prosecution and Maintenance. Licensor shall be responsible for, and shall control, the preparation, filing, prosecution, and maintenance of all patent applications and patents covering the Licensed IP, at Licensor’s expense. Licensee shall cooperate fully as reasonably requested.
6.2 Enforcement.
(a) Notice. Each Party shall promptly notify the other in writing of any known or suspected infringement of the Licensed IP in the Territory.
(b) First Right to Enforce. [SELECT: Licensor / Licensee] shall have the first right, but not the obligation, to initiate and control any enforcement action.
(c) Cooperation. The non-controlling Party shall cooperate and join any action if required for standing, at the controlling Party’s expense.
(d) Recoveries. Any monetary recovery shall first reimburse the Parties’ litigation costs and the remainder shall be [DIVISION OF RECOVERIES].
6.3 Marking. Licensee shall mark all products and Documentation made or distributed under this Agreement with the appropriate intellectual property notices required by applicable law.
7. CONFIDENTIALITY
7.1 Definition. “Confidential Information” means any non-public information disclosed by one Party (the “Disclosing Party”) to the other (the “Receiving Party”) that is designated as confidential or that a reasonable person would understand to be confidential.
7.2 Obligations. The Receiving Party shall (a) use Confidential Information solely for purposes of performing under this Agreement, (b) protect such information with at least the same degree of care it uses to protect its own confidential information (but no less than reasonable care), and (c) not disclose Confidential Information to any third party except as expressly permitted.
7.3 Exceptions. Confidential Information does not include information that (a) is or becomes publicly available without breach of this Agreement, (b) is known by the Receiving Party prior to disclosure, (c) is independently developed without use of Confidential Information, or (d) is lawfully obtained from a third party without restriction.
7.4 Compelled Disclosure. The Receiving Party may disclose Confidential Information to the extent required by law, provided it gives prompt written notice and reasonable cooperation to seek protective treatment.
7.5 Injunctive Relief. The Parties acknowledge that breach of this Section 7 would cause irreparable harm for which monetary damages may be inadequate; therefore, the Disclosing Party shall be entitled to seek injunctive relief without the necessity of posting bond.
8. REPRESENTATIONS & WARRANTIES
8.1 Mutual. Each Party represents and warrants that:
(a) it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation;
(b) it has full power and authority to enter into this Agreement and to perform its obligations; and
(c) this Agreement constitutes a valid and binding obligation enforceable against it in accordance with its terms.
8.2 Licensor. Licensor further represents and warrants that:
(a) it is the sole and exclusive owner, or otherwise has sufficient rights, of the Licensed IP to grant the License;
(b) to Licensor’s knowledge, the Licensed IP does not infringe any third-party intellectual property rights; and
(c) Licensor has not granted any license inconsistent with the rights granted to Licensee.
8.3 Licensee. Licensee represents and warrants that:
(a) it possesses the expertise and resources necessary to exercise the License in compliance with all applicable laws; and
(b) it will not knowingly use the Licensed IP in a manner that infringes any third-party intellectual property rights.
8.4 No Other Warranties. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 8, NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-INFRINGEMENT.
8.5 Survival. All representations and warranties shall survive for a period of [NUMBER] years after termination or expiration of this Agreement.
9. COVENANTS & RESTRICTIONS
9.1 Compliance with Laws. Licensee shall comply with all applicable laws, regulations, and industry standards in the exercise of the License, including export control laws and anti-corruption laws.
9.2 Reverse Engineering. Except to the extent expressly permitted by applicable law notwithstanding this limitation, Licensee shall not reverse engineer, decompile, or disassemble any portion of the Licensed IP.
9.3 Quality Control (Trademark-Specific). Licensee shall use the Licensed IP-related trademarks only in accordance with quality standards established by Licensor and shall permit Licensor to inspect and monitor Licensee’s use of such trademarks.
9.4 Improvements. Ownership of Improvements shall [SELECT: vest in Licensor / vest in Licensee / follow a defined split]. Licensee hereby [assigns / grants Licensor a license to] all right, title, and interest in Improvements as set forth in Exhibit C.
9.5 Notice and Cure. Licensee shall notify Licensor within [NUMBER] days of becoming aware of any breach of its obligations and shall cure such breach within [NUMBER] days thereafter.
10. TERM AND TERMINATION
10.1 Term. Unless earlier terminated pursuant to this Section 10, the term of this Agreement (the “Term”) shall commence on the Effective Date and continue [SELECT: for a period of X years / until the expiration of the last-to-expire patent comprising the Licensed IP / perpetually].
10.2 Termination for Cause. Either Party may terminate this Agreement upon written notice if the other Party materially breaches this Agreement and fails to cure such breach within [NUMBER] days after written notice of breach.
10.3 Termination for Insolvency. Either Party may terminate immediately upon written notice if the other Party (a) becomes insolvent, (b) files or has filed against it a petition for bankruptcy, or (c) makes an assignment for the benefit of creditors.
10.4 Effect of Expiration or Termination. Upon any expiration or termination of this Agreement:
(a) all licenses granted to Licensee shall immediately terminate;
(b) Licensee shall cease all use of the Licensed IP and, at Licensor’s option, return or destroy all tangible embodiments thereof;
(c) Licensee shall deliver a final Royalty report and pay all amounts due within [NUMBER] days; and
(d) Sections [Specify Surviving Sections, e.g., 1, 5, 6.2, 7, 8.4, 11–17] shall survive.
11. DEFAULT & REMEDIES
11.1 Events of Default. The following constitute Events of Default:
(a) failure to pay any undisputed amount when due;
(b) breach of confidentiality or intellectual property provisions;
(c) material breach of any covenant, representation, or warranty; or
(d) any event of insolvency described in Section 10.3.
11.2 Notice and Cure. Upon occurrence of an Event of Default, the non-defaulting Party shall give written notice specifying the default in reasonable detail. The defaulting Party shall have [NUMBER] days to cure monetary defaults and [NUMBER] days to cure non-monetary defaults.
11.3 Graduated Remedies. If the defaulting Party fails to cure within the applicable period, the non-defaulting Party may, without limitation to any other remedies:
(a) suspend performance;
(b) accelerate all amounts due;
(c) seek specific performance or injunctive relief; and
(d) terminate the Agreement under Section 10.2.
11.4 Attorneys’ Fees. The prevailing Party in any action to enforce this Agreement shall be entitled to recover its reasonable attorneys’ fees and costs.
12. INDEMNIFICATION
12.1 Licensor IP Indemnity. Licensor shall indemnify, defend, and hold harmless Licensee and its officers, directors, employees, and agents (“Licensee Indemnitees”) from and against any third-party claims, losses, liabilities, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or resulting from any allegation that the Licensed IP infringes or misappropriates any intellectual property right of a third party, except to the extent such claim arises from (a) modifications made by or on behalf of Licensee without Licensor’s written consent, (b) combination with products or services not provided by Licensor, or (c) Licensee’s use not in accordance with this Agreement.
12.2 Conditions. The indemnified Party shall (a) provide prompt written notice of the claim, (b) permit the indemnifying Party to control the defense and settlement, and (c) provide reasonable cooperation. Failure to comply with (a)–(c) shall relieve the indemnifying Party of liability solely to the extent prejudiced.
12.3 Infringement Mitigation. If the Licensed IP becomes, or in Licensor’s opinion is likely to become, subject to an infringement claim, Licensor may, at its option and expense: (a) procure for Licensee the right to continue using the Licensed IP; (b) replace or modify the Licensed IP so that it is non-infringing; or (c) terminate the affected license and refund prepaid fees for unused portions of the Term.
12.4 Licensee Indemnity. Licensee shall indemnify, defend, and hold harmless Licensor and its officers, directors, employees, and agents (“Licensor Indemnitees”) against claims arising out of (a) Licensee’s breach of this Agreement, or (b) Licensee’s gross negligence or willful misconduct.
13. LIMITATION OF LIABILITY
13.1 EXCEPT FOR (i) A PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, (ii) LICENSEE’S BREACH OF CONFIDENTIALITY OR USE RESTRICTIONS, OR (iii) AMOUNTS PAYABLE PURSUANT TO SECTION 12 (INDEMNIFICATION), NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, EVEN IF ADVISED OF THE POSSIBILITY THEREOF.
13.2 NO CAP FOR IP BREACH. THE LIMITATIONS IN SECTION 13.1 SHALL NOT APPLY TO LICENSOR’S BREACH OF ITS OBLIGATIONS WITH RESPECT TO THE LICENSED IP OR LICENSEE’S BREACH OF USE RESTRICTIONS FOR THE LICENSED IP.
[// GUIDANCE: If the Parties wish to impose an overall monetary cap for non-IP claims, add it here.]
14. INSURANCE
During the Term and for [NUMBER] years thereafter, each Party shall maintain insurance policies with carriers rated A- or better by AM Best with the following minimum limits:
(a) Commercial General Liability: [AMOUNT] per occurrence;
(b) Errors & Omissions/Professional Liability: [AMOUNT] per claim; and
(c) Cyber Liability (if applicable): [AMOUNT] per claim.
Each Party shall furnish certificates of insurance upon reasonable request.
15. FORCE MAJEURE
Neither Party shall be liable for any failure or delay in performance (except payment obligations) due to causes beyond its reasonable control, including acts of God, war, terrorism, civil unrest, government action, epidemic, pandemic, labor disputes, or failures of suppliers or subcontractors (“Force Majeure”). The affected Party shall notify the other promptly and use commercially reasonable efforts to mitigate the effect.
16. DISPUTE RESOLUTION
16.1 Governing Law. This Agreement and any dispute arising out of or related hereto shall be governed by and construed in accordance with the laws of [GOVERNING STATE/COUNTRY], without regard to its conflicts-of-law rules.
16.2 Exclusive Jurisdiction. Subject to Section 16.3, the Parties irrevocably submit to the exclusive jurisdiction of the state and federal courts located in [FORUM VENUE] and waive any objection to venue or inconvenient forum.
16.3 Arbitration (Optional). [SELECT ONE OF THE FOLLOWING OPTIONS—DELETE THE OTHER]
OPTION A – No Arbitration. The Parties agree that all disputes shall be resolved solely in the courts specified in Section 16.2.
OPTION B – Arbitration. Any dispute that the Parties are unable to resolve amicably shall be finally settled by confidential, binding arbitration in [CITY, STATE] under the Arbitration Rules by [NUMBER] arbitrator(s). Judgment on the award may be entered in any court of competent jurisdiction.
16.4 Jury Trial Waiver. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT.
16.5 Injunctive Relief. Notwithstanding anything herein, either Party may seek injunctive or other equitable relief in any court of competent jurisdiction to protect its intellectual property rights or Confidential Information.
17. GENERAL PROVISIONS
17.1 Amendment & Waiver. No amendment or modification of this Agreement shall be effective unless in writing and signed by both Parties. No waiver shall be effective unless in writing and signed by the waiving Party, and any waiver shall apply only to the specific instance waived.
17.2 Assignment. Neither Party may assign or delegate this Agreement, in whole or in part, without the prior written consent of the other Party, except that either Party may assign this Agreement without consent (a) to an Affiliate, or (b) in connection with a merger, acquisition, or sale of substantially all of its assets, provided that the assignee agrees in writing to assume all obligations. Any purported assignment in breach of this Section 17.2 shall be void.
17.3 Successors & Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
17.4 Severability. If any provision is held invalid or unenforceable, the remainder shall remain in full force, and the invalid provision shall be interpreted to fulfill its intended purpose to the maximum extent permitted.
17.5 Notices. All notices shall be in writing and delivered by hand, certified mail (return receipt requested), nationally recognized overnight courier, or email (with confirmation of receipt) to the addresses set forth in the preamble (or such other address designated in writing). Notices are effective upon receipt.
17.6 Integration. This Agreement, including all Exhibits, constitutes the entire understanding and agreement of the Parties with respect to the subject matter and supersedes all prior or contemporaneous agreements, understandings, and representations.
17.7 Counterparts & Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which is deemed an original, and all of which constitute one instrument. Signatures delivered electronically or by facsimile shall be deemed original and binding.
17.8 Interpretation. Headings are for convenience only and shall not affect interpretation. The word “including” means “including without limitation.” The Parties acknowledge that each Party participated in drafting and no presumption of construction against the drafter shall apply.
18. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.
| LICENSOR | LICENSEE |
|---|---|
| [FULL LEGAL NAME OF LICENSOR] | [FULL LEGAL NAME OF LICENSEE] |
| By: _________ | By: _________ |
| Name: _______ | Name: _______ |
| Title: _______ | Title: _______ |
| Date: ________ | Date: ________ |
EXHIBIT A – DESCRIPTION OF LICENSED IP
[Detailed list (patent numbers, copyright registrations, trademarks, software modules, documentation, etc.)]
EXHIBIT B – MILESTONE EVENTS & PAYMENTS
| Milestone | Description | Payment |
|---|---|---|
| 1 | [Milestone Description] | [Amount] |
| … | … | … |
EXHIBIT C – IMPROVEMENTS OWNERSHIP & LICENSE
[Specify ownership structure, assignment language, and any royalty reductions or cross-licensing.]
[// GUIDANCE: Verify statutory compliance (e.g., export control, data privacy) and remove/modify any bracketed placeholders before finalizing the Agreement for client use.]