Product Licensing Agreement for the United Kingdom

Product Licensing Agreement Template for England and Wales

A Product Licensing Agreement is a legally binding contract under English and Welsh law that enables one party (licensor) to grant another party (licensee) specific rights to use, manufacture, distribute, or sell their product. This agreement establishes the terms and conditions of the license, including payment terms, quality standards, territorial restrictions, and intellectual property rights protection. It provides a framework for commercializing products while maintaining control over their use and protecting the licensor's interests.

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What is a Product Licensing Agreement?

A Product Licensing Agreement becomes necessary when a product owner wishes to allow others to commercially exploit their product while retaining ownership rights. This agreement, governed by English and Welsh law, defines the scope of permitted use, financial arrangements, quality control measures, and protection of intellectual property. It's particularly vital in situations involving manufactured goods, technology products, or branded merchandise where controlled distribution or manufacturing by third parties is desired. The agreement helps balance the licensor's need to protect their product with the licensee's need for clear operational guidelines.

What sections should be included in a Product Licensing Agreement?

1. Parties: Identifies and defines the contracting parties - the licensor and licensee

2. Background: Explains context of the agreement, including description of the product and purpose of the licensing arrangement

3. Definitions: Defines key terms used throughout the agreement, including Licensed Products, Territory, and Intellectual Property Rights

4. Grant of License: Specifies the scope, nature, and exclusivity of the license granted

5. Payment Terms: Details licensing fees, royalties, payment arrangements, and reporting requirements

6. IP Rights: Addresses ownership, protection, and enforcement of intellectual property rights

7. Quality Control: Sets standards for product quality and inspection rights

8. Term and Termination: Specifies duration, renewal options, and termination conditions

9. Warranties and Indemnities: Contains warranties regarding IP ownership and product quality, plus related indemnities

10. Confidentiality: Governs treatment of confidential information exchanged under the agreement

What sections are optional to include in a Product Licensing Agreement?

1. Territory Restrictions: Defines geographical limitations of the license when territory-specific restrictions apply

2. Sublicensing Rights: Addresses ability to sublicense to third parties when sublicensing might be contemplated

3. Marketing and Promotion: Details marketing requirements and restrictions when specific promotional obligations exist

4. Minimum Performance Requirements: Sets minimum sales or performance targets when needed to maintain license rights

5. Technical Support: Outlines technical support obligations when ongoing support is part of the arrangement

What schedules should be included in a Product Licensing Agreement?

1. Schedule 1 - Licensed Products: Detailed description and specifications of products covered by license

2. Schedule 2 - Technical Specifications: Technical requirements and standards for licensed products

3. Schedule 3 - Royalty Calculations: Detailed methodology for calculating royalties and example calculations

4. Schedule 4 - Quality Standards: Specific quality requirements, testing procedures, and acceptance criteria

5. Schedule 5 - Approved Manufacturing Facilities: List of approved facilities for manufacturing licensed products

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

England and Wales

Publisher

Genie AI

Document Type

Lien Notice

Cost

Free to use
Clauses
Industries

Patents Act 1977: Primary legislation governing patent rights and enforcement in the UK, crucial for protecting inventions and technical innovations in licensing agreements

Trade Marks Act 1994: Legislation protecting distinctive signs, brands and marks, essential for brand licensing and merchandise agreements

Copyright, Designs and Patents Act 1988: Key legislation protecting creative works, designs and related rights, fundamental for licensing of creative and artistic works

Registered Designs Act 1949: Law protecting the visual appearance of products, important for design-focused licensing agreements

Unfair Contract Terms Act 1977: Regulates contractual terms, particularly regarding limitation of liability and unfair terms in commercial contracts

Consumer Rights Act 2015: Protects consumer interests in B2C transactions, including licensing agreements with individual consumers

Competition Act 1998: Ensures licensing agreements don't restrict competition or create monopolies in the market

Enterprise Act 2002: Provides framework for market regulation and competition law enforcement in licensing contexts

UK GDPR: Regulates personal data processing and transfer, relevant when licensing involves data processing or sharing

Data Protection Act 2018: UK's implementation of data protection requirements, complementing UK GDPR in licensing arrangements

Consumer Protection from Unfair Trading Regulations 2008: Protects against unfair commercial practices in consumer-facing licensing agreements

Consumer Contracts Regulations 2013: Governs distance selling and online contracts, including digital licensing to consumers

Value Added Tax Act 1994: Determines VAT treatment of licensing fees and royalty payments

Technology Transfer Block Exemption Regulation: Provides safe harbor for certain IP licensing agreements under competition law

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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