Introduction to licensing intellectual property

In many cases, the owner of an IP right may not be the person best placed to commercially exploit it. Often the owner lacks the necessary skill, capital or commitment. A common solution is for the IP owner to find someone who does have these things, and grant a licence to that person. IP licensing is also common in joint venture arrangements and in the settlement of disputes.

IP licences take many forms, depending on whether the IP involves patent rights, design rights, copyright, trade marks, know-how, or a combination of these things. IP licences also include franchise agreements and software licences.

A well-drafted licence will include a number of key terms. This information sheet is a brief guide to the licensing of IP rights, and summarises what you need to consider if you are preparing or negotiating an IP licence.