A license agreement is a business contract often used as an
alternative to franchising. Under a licensing arrangement, the
owner of an intellectual property right (“Licensor”)
grants to another party (“Licensee”) the right to use
or sell products or services under the Licensor's intellectual
property rights.
Differently from the franchising, which is governed by the
Malaysia Franchise Act, licensing agreements are not regulated by
any specific legislation. The concept of licensing is purely based
on the terms and conditions of the contractual agreement between
the Licensor and the Licensee, commonly known as Licensing
Agreement.
A License Agreement is commonly used to set out the terms of the
License, among which, obligations and rights of the parties and the
license fee, typically calculated based on a percentage of sales or
profits made by the Licensee.
