Define: Licensed Products

What Licensed Products Means in a Contract

In a licensing agreement, Licensed Products identifies the exact goods that fall under the scope of the license grant and therefore trigger the licensee's obligations, most commonly the payment of royalties. The term ties the commercial product to the underlying intellectual property, whether patents, know-how, or both, so that everyone can identify which items are covered and which are not. Without this defined term, a licensor and licensee would have no reliable way to determine when royalty, reporting, or quality obligations actually apply.

The definition typically links back to two other defined terms: the Patents and the Know-how. A product becomes a Licensed Product if it falls within a Valid Claim of the Patents, or if its development or production makes use of the Know-how, or both. This dual-pathway structure is common in technology and manufacturing licenses where a licensor may share both patented inventions and unpatented technical expertise.

Because the term drives so much of the operative language elsewhere in the contract, such as royalty calculations, audit rights, and territory restrictions, it functions as a gateway definition. Get it wrong or leave it vague, and disputes over scope, underpayment, or unauthorized use become far more likely.

How Licensed Products Is Defined or Measured

Most agreements measure whether a product qualifies as a Licensed Product by reference to two tests. The first is a patent-claim test, asking whether the product falls within any Valid Claim of the licensed Patents, meaning an unexpired, unchallenged, or otherwise enforceable patent claim that covers the product's design, composition, or method of manufacture. The second is a know-how test, asking whether the product incorporates the licensed Know-how or whether its development or production made use of that Know-how, even if no patent claim applies.

These tests are often drafted to work independently, using.