Licence agreements: 6 things to consider
A licence agreement (sometimes referred to as a licensing agreement) is a contract whereby the owner of an asset grants another party permission to use that asset, usually in return for a fee.
Application for business people
The biggest relevance of licence agreements to business people is generally in terms of intellectual property or technology. Larger companies invest a lot of capital and resources into researching and developing a product for a specific purpose. Businesses then pay the developer for the right to use the product. The terms of this use and remuneration are set out in a licence agreement. A very common example is a licence agreement for a particular software program.
Alternatively, a business may be the owner of intellectual property. They may have designed a product, registered a trademark or patent or own a copyright. If that business wants to grant another party the right to use this asset, then a licence agreement will set out the conditions to govern such use. This can be a very important mechanism for businesses wishing to protect their brand, while also ensuring that they making a profit from third parties using whatever they have designed.
6 key things to consider
Granting another party the right to use an asset can be a big decision for a company. Some of the key factors you should consider before doing so include:
- Exactly what assets or products the licence agreement covers.
- The scope of the licence, that is, what the licensee is able to do with the asset that is the subject of the agreement.
- Whether there is any geographical limit to the licence agreement.
- Whether you, as the licensor, wish to provide any training or other technical assistance to the licensee for the purpose of using the asset.
- What payment the licensor will receive under the agreement, whether it should be an upfront fee or royalties or both.
- Whether a confidentiality agreement is also required to govern any sensitive information that may be shared as a result of the licence agreement.
Want my view on your own situation?
Book an initial consultation: up to two hours with me by phone for a fixed fee of $1,650 (including GST), then a short written note of my advice and next steps. If my conflict check means I can't act, I'll refund your fee in full. To check anything first, email
info@klaw.com.auor call
(07) 3103 3199.
Joe Kafrouni, Accredited Specialist in Business Law, Kafrouni Law
Disclaimer: This article is general information only and is not legal advice. Before acting on it, get advice on your own circumstances. To the extent the law allows, Kafrouni Law accepts no liability for any loss arising from reliance on it. This article is the copyright of Kafrouni Law.
What People Say
Book an initial consultation
An initial consultation is the best way for us to find out whether, and how, I can help. It suits business owners and directors facing a decision that matters. You get my considered view of your situation, not just a first impression.
The fee is a fixed $1,650 (including GST). It covers a phone consultation of up to two hours, plus up to one hour of my time to consider the material you send me beforehand and to prepare my written note afterwards. Here is how it works:
1. When you book, you tell me briefly what the matter is about and who else is involved, so I can carry out a conflict check and confirm I’m free to act. If I can’t act for you, I’ll refund your fee in full.
2. I tell you what information and documents I’d like to see, and I consider them before we speak.
3. We talk it through by phone. I give you my initial advice, the options I see and what I’d do in your shoes.
4. Afterwards, I send you a short written note of my advice and the next steps I recommend.
If I can help further, I’ll explain how. If I can’t, I’ll say so. You are under no obligation to engage me further. If your matter needs more than this, I’ll send you a proposal setting out how I can help and an estimate of my fees. No further work starts until you accept it.
I keep only a limited number of consultation times. If none suits you, or you’d like to check anything before booking, email info@klaw.com.au and I’ll do my best to accommodate you.