Sub Licence Agreement Template for the United Arab Emirates

A Sub Licence Agreement allows you to legally transfer specific rights from an existing license to a third party while maintaining your obligations under the original license. This document is essential when you need to share licensed intellectual property, technology, or commercial rights with business partners, distributors, or subsidiaries in the United Arab Emirates.

When do you need this document?

You need a Sub Licence Agreement when you hold licensing rights that you want to share with other parties while remaining compliant with your original license terms. This commonly occurs in technology transfer arrangements where you've licensed software or patents and need to allow your business partners to use them. Franchise operations frequently use sub-licensing when expanding through local partners who need access to trademarks and business methods. Manufacturing companies often require sub-licenses when outsourcing production to UAE-based facilities that need to use proprietary designs or processes. International businesses operating in UAE free zones regularly use sub-licensing to allow local distributors or service providers to utilize their intellectual property rights.

Key legal considerations

Your Sub Licence Agreement must clearly define the scope of rights being granted and any restrictions on use, territory, or duration. The agreement should specify whether the sub-licensee can further sub-license the rights and establish quality control measures to protect the licensed property's integrity. Payment terms, including royalties or fixed fees, must be clearly outlined along with reporting obligations and audit rights. You must ensure the sub-license doesn't violate the terms of your original license agreement, and include provisions for termination if the head license ends. The document should address confidentiality obligations, indemnification clauses, and dispute resolution mechanisms. Consider including guarantor provisions if the sub-licensee's financial stability is uncertain, and specify the governing law and jurisdiction for any disputes.

Legal requirements in United Arab Emirates

Under UAE Federal Law No. 5 of 1985 (Civil Code), your Sub Licence Agreement must meet specific contractual validity requirements including clear offer, acceptance, and consideration. The agreement must comply with UAE Federal Law No. 18 of 1993 (Commercial Code) for commercial licensing arrangements and ensure adherence to Islamic law principles that prohibit excessive uncertainty or unfair terms. If licensing intellectual property, you must comply with UAE Federal Law No. 7 of 2002 (Copyright Law) and Federal Law No. 17 of 2002 (Industrial Property Law) regarding proper registration and protection of rights. The agreement should be structured to avoid violating UAE Federal Law No. 4 of 2012 (Competition Law) by creating monopolistic practices or unfair competition. All parties must be properly identified with full legal names and UAE addresses, and the document may require notarization or registration depending on the type of rights being sub-licensed and the parties' business activities.