IP License Agreement

Whether you are an artist or a plant breeder, a software developer or an Instagram star, you can protect and license your ideas with this Intellectual Property Licensing Agreement.

‘A common commercialisation vehicle is to license, not sell, an IP right via one or more licensing agreements. It means that you give permission for another party to use your IP on agreed terms and conditions. If you don’t have the resources or experience to develop and market your product or service, licensing can be an effective strategy.

Usually, the licensor (IP owner) requires each licensee to pay a percentage of sales revenue in arrears to the licensor at regular intervals. These payments are called royalties.

Many variables may be negotiated for each licence agreement, including the type of license, license conditions and license royalties. You should consider:

  • whether the rights are exclusive, non-exclusive or sole to the licensee;
  • whether sub-licensing by the licensee is allowed;
  • what ‘territory’ (e.g. which country/ies) applies;
  • what limitations (if any) exist to the fields of application (i.e. uses) of the IP;
  • what limitations (if any) exist to the avenues of exploitation (marketing, manufacturing, R&D);
  • what time limitations apply (expiry terms);
  • what lump-sum payments (if any) are required to be paid by the licensee;
  • what is the royalty rate and what other royalty terms apply; or
  • what performance obligations (e.g. development milestones and minimum sales) are imposed upon the licensee’.

(IP Australia)

Time To Complete:

Approximately 15 minutes.


Approximately 20 pages long.


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