Right Of First Refusal License Agreement for Canada

Right Of First Refusal License Agreement Template for Canada

A Right of First Refusal License Agreement under Canadian law is a specialized legal document that combines licensing rights with a right of first refusal mechanism. This agreement grants a licensee specific rights to use intellectual property while also providing them with the first opportunity to acquire additional rights or licenses before they can be offered to third parties. The agreement must comply with Canadian federal laws, including the Competition Act and relevant intellectual property legislation, as well as provincial contract laws. It typically includes detailed provisions for the licensing terms, triggering events for the right of first refusal, notification procedures, and the mechanism for exercising these rights.

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What is a Right Of First Refusal License Agreement?

The Right of First Refusal License Agreement is a strategic legal instrument used in Canadian business transactions where a party wishes to grant both immediate license rights and preferential future rights to another party. This document is particularly valuable in situations where the licensor wants to maintain control over future licensing opportunities while providing a privileged position to a specific licensee. The agreement is governed by Canadian federal and provincial laws and is commonly used in technology transfers, patent licensing, software licensing, and other intellectual property transactions. It includes comprehensive details about the licensed rights, conditions for exercising the right of first refusal, pricing mechanisms, and compliance requirements. This type of agreement is especially relevant in industries with rapid technological advancement or where sequential licensing arrangements are common.

What sections should be included in a Right Of First Refusal License Agreement?

1. Parties: Identification of the licensor and licensee with full legal names and addresses

2. Background: Context of the agreement, relationship between parties, and brief description of the subject matter

3. Definitions: Definitions of key terms used throughout the agreement

4. Grant of License: Detailed description of the license rights being granted, including scope, territory, and any restrictions

5. Right of First Refusal: Core section detailing the ROFR mechanism, trigger events, and conditions

6. Notice and Exercise Procedure: Process for notification of trigger events and procedure for exercising the ROFR

7. License Fees and Payment Terms: Financial terms including licensing fees, royalties, and payment schedules

8. Term and Termination: Duration of the agreement and circumstances for termination

9. Representations and Warranties: Standard representations and warranties from both parties

10. Confidentiality: Provisions for protecting confidential information exchanged under the agreement

11. Intellectual Property Rights: Clarification of IP ownership and rights

12. General Provisions: Standard boilerplate clauses including notices, assignment, and governing law

What sections are optional to include in a Right Of First Refusal License Agreement?

1. Quality Control: Required when licensing involves trademarks or brand-sensitive materials

2. Export Control: Necessary when the licensed rights may be subject to international trade restrictions

3. Source Code Escrow: Required for software licensing agreements

4. Training and Support: Included when technical support or training is part of the license arrangement

5. Insurance: Required when licensing involves high-risk activities or valuable IP

6. Data Protection: Necessary when personal data processing is involved

7. Anti-Corruption: Required for international agreements or when dealing with government entities

8. Change of Control: Important when parties want to address potential ownership changes

What schedules should be included in a Right Of First Refusal License Agreement?

1. Schedule A - Licensed Rights: Detailed description of the intellectual property or rights being licensed

2. Schedule B - License Fee Schedule: Detailed breakdown of all fees, royalties, and payment terms

3. Schedule C - ROFR Process: Step-by-step procedure for exercising the right of first refusal

4. Schedule D - Technical Specifications: Technical details of licensed technology or products

5. Schedule E - Territory: Detailed description of geographic territories covered by the license

6. Appendix 1 - Notice Forms: Template forms for various notices required under the agreement

7. Appendix 2 - Quality Standards: Specific quality requirements and standards for licensed products/services

8. Appendix 3 - Approved Sub-licensees: List of pre-approved sub-licensees if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Licensing Agreement

Sector

IP

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Technology

Software Development

Manufacturing

Pharmaceuticals

Biotechnology

Media and Entertainment

Telecommunications

Industrial Design

Consumer Products

Research and Development

Automotive

Healthcare

Relevant Teams

Legal

Intellectual Property

Business Development

Commercial

Research and Development

Technology Transfer

Corporate Development

Strategy

Innovation

Licensing

Product Development

Relevant Roles

Chief Legal Officer

Intellectual Property Manager

Licensing Director

Business Development Manager

Contract Manager

Technology Transfer Officer

Patent Attorney

Commercial Counsel

Chief Technology Officer

Innovation Director

Legal Counsel

Intellectual Property Counsel

Business Development Director

Strategic Partnerships Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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