Technology licensing agreements are contracts or arrangements that involve an owner of a technology-based intellectual property, also known as a licensor, who will accept compensation in exchange for allowing an outside party, known as the licensee, resell the property, make alterations to it, or simply use it.

The following are some of the most frequently asked questions regarding technology license agreements. These question will include important elements you should consider including when drafting your technology license agreement.

Why is it important to obtain a technology license agreement?

Establishing a well-made technology license agreement can allow leverage on a contract between the owner of the intellectual property and the potential licensee. For the licensor, it is important that the agreement highlight elements that would benefit his or her organization.

What should I include in an agreement?

Before a property owner agrees to license his or her technology, it is important to look into the agreement’s specific terms and/or conditions. A contract can and should vary depending on the type of business the property owner is in.

The following are various elements that could be important in a technology license agreement:

Scope and subject matter – These are elements that should be explicitly defined in a technology license agreement. It is important to be detailed about certain restrictions such as technology uses, geography-based limitations, expansion, sublicensing, and property uses.

Contract terms or renewal opportunities – The agreement should disclose the starting date in which the licensee can use the product as well as the length of time for the agreement. Furthermore, the agreement should also include options for a renewal or extension. The agreement should strategize a method for the licensee to advise the property owner of the intent to agree or disagree for a renewal. This can help both parties avoid unnecessary confusion.

Other important elements that should be included are:

• The means of which either party can terminate the contract
• The commitments to responsibilities to be held by each party once a termination has been established
• Revision rights, if any, that the property owner holds once the agreement has been established

Payments – For a majority of agreements, it is beneficial to include the initial payment and subsequent royalties.

Quality control and protection – Depending on the wants and needs for either party, it could be important for the licensor to remain in some form of control over the property. For instance, the property owner may want to remain in control of the product’s packaging design, advertising materials, or labeling. Standards for this should be included in the agreement.

Obtain the Support of a Qualified Attorney

If you are looking into entering into an agreement with a party whom you intend to lend your technology license to, you should consider seeking the legal advice of an attorney who has experience in drafting these agreements. An attorney with the right experience will ensure that your organization’s needs are met when entering into a technology licensing agreement.

Attorney John O’Brien is specialized in drafting technology licensing agreements. Attorney O’Brien has many years of experience in helping clients construct a contract that adequately represent their needs and stipulations.