10 Key Intellectual Property (IP) Licensing Agreement Terms

Intellectual property (IP) can be an important source of revenue to a business. There are three main ways intellectual property (IP) owners generate revenue from their IP rights: use the IP rights themselves to produce a product or service; assign (sell) the rights to another party to produce a product or service; or license them to another party to do so. Licensing all or a part of the IP rights to another party (the "licensee") to use in exchange for a fee (usually called a "royalty") is one of the most common ways. A license of IP rights does not transfer ownership in the IP; it only gives the licensee permission to use the IP within the terms of the IP licensing agreement (the legal contract by which the IP rights are licensed). The three primary kinds of IP licence are: