IP licensing

Licensing is how intellectual property earns money without being sold: a brand lent to a manufacturer, software made available to customers, a design produced under licence abroad, a technology shared with a partner. It is also how a business comes to depend on rights it does not own — the software it runs on, the fonts and images in its marketing. Licences are often signed on the other party’s template, and the gaps show later: a licensee who sublicenses without asking, a product line that turns out not to be covered, a licence that falls away when the licensor is sold.

A licence is a contract about an asset that can be copied endlessly and damaged by careless use. Drafting one well, or checking one you already rely on, means taking account of:

• the rules on defining what is licensed — which marks, works, designs or know-how, for which products and which uses;
• the rules on sublicensing, and on whether a licensee may pass its rights to affiliates, distributors or a buyer of its business;
• the rules on quality control, and on why a brand licensed without supervision can lose its value and its protection;
• the rules on improvements and new versions, and on who owns and may use what the licensee develops;
• the rules on sales reports and on the licensor’s right to inspect the licensee’s books;
• the rules on open-source and third-party components, and on the conditions they impose on software you sell;
• the rules on warranties of title, and on who defends a claim brought against the licensee by a third party;
• the rules on competition law, and on how far a licence may restrict a licensee’s prices, customers and sales;
• the rules on insolvency and change of control, and on whether a licence survives when either party fails or is sold.

Our lawyers can support you with this.