Royalty Agreement for Malaysia

Royalty Agreement Template for Malaysia

A comprehensive legal document governed by Malaysian law that establishes the terms and conditions under which a licensor grants rights to use intellectual property to a licensee in exchange for royalty payments. The agreement details the licensed rights, payment structures, reporting requirements, quality control measures, and compliance with Malaysian regulatory requirements, including relevant provisions of the Contracts Act 1950 and specific intellectual property legislation. It incorporates provisions for audit rights, termination conditions, and dispute resolution mechanisms within the Malaysian legal framework.

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What is a Royalty Agreement?

This Royalty Agreement template is designed for use under Malaysian law when one party (licensor) wishes to grant another party (licensee) the right to use specific intellectual property in exchange for royalty payments. The document is essential for businesses engaging in licensing arrangements in Malaysia, whether for trademarks, patents, copyrights, or other intellectual property rights. The agreement encompasses crucial elements required by Malaysian legislation, including the Contracts Act 1950, relevant IP laws, and tax regulations. It provides comprehensive coverage of payment terms, quality control measures, reporting requirements, and compliance obligations, while ensuring alignment with Malaysian regulatory requirements for both domestic and international licensing arrangements.

What sections should be included in a Royalty Agreement?

1. Parties: Identifies and provides full details of the licensor and licensee

2. Background: Explains the context of the agreement, including ownership of the intellectual property and intention to license

3. Definitions: Defines key terms used throughout the agreement including 'Licensed Property', 'Royalty Rate', 'Net Sales', etc.

4. Grant of Rights: Specifies the exact rights being licensed, including scope, territory, and any restrictions

5. Term and Renewal: Defines the duration of the agreement and any renewal options

6. Royalty Payments: Details the royalty rates, calculation methods, and payment terms

7. Payment Terms: Specifies payment frequency, method, currency, and handling of taxes

8. Reporting Requirements: Outlines the licensee's obligations for sales reporting and royalty calculations

9. Quality Control: Sets standards for the use of the licensed property and quality maintenance

10. Audit Rights: Establishes the licensor's right to audit the licensee's records

11. Intellectual Property Protection: Addresses IP ownership, protection, and infringement handling

12. Termination: Details circumstances for termination and post-termination obligations

13. Governing Law and Jurisdiction: Specifies Malaysian law as governing law and sets jurisdiction for disputes

What sections are optional to include in a Royalty Agreement?

1. Minimum Guarantee: Include when there's a minimum royalty payment requirement regardless of sales

2. Sub-licensing Rights: Include when the licensee is permitted to sub-license the rights

3. Territory Restrictions: Include for international agreements or when territory limitations apply

4. Marketing and Promotion: Include when specific marketing obligations or restrictions exist

5. Currency Conversion: Include for international agreements with multiple currencies

6. Force Majeure: Include when specific provisions for unforeseen circumstances are needed

7. Non-Competition: Include when restricting licensee's involvement in competing products

8. Bank Guarantee: Include when financial security is required from the licensee

What schedules should be included in a Royalty Agreement?

1. Schedule 1 - Licensed Property: Detailed description of the intellectual property being licensed

2. Schedule 2 - Royalty Rates: Detailed breakdown of royalty rates, including any tiered structure

3. Schedule 3 - Approved Products: List of products/services approved for use with the licensed property

4. Schedule 4 - Quality Standards: Detailed quality control requirements and specifications

5. Schedule 5 - Reporting Format: Template for sales reports and royalty calculations

6. Schedule 6 - Territory Definition: Detailed description of licensed territories and any restrictions

7. Appendix A - Brand Guidelines: Guidelines for proper use of licensed trademarks or brands

8. Appendix B - Compliance Requirements: Specific compliance requirements for the licensed property

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

Malaysia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Clauses
Relevant Industries

Technology

Entertainment

Manufacturing

Consumer Goods

Fashion and Apparel

Media and Broadcasting

Pharmaceuticals

Software and IT

Food and Beverage

Education

Research and Development

Telecommunications

Relevant Teams

Legal

Finance

Intellectual Property

Business Development

Commercial

Compliance

Brand Management

Product Development

Treasury

Tax

Relevant Roles

Intellectual Property Manager

Legal Counsel

Commercial Director

Licensing Manager

Business Development Manager

Finance Director

Compliance Officer

Brand Manager

Product Development Manager

Chief Technology Officer

Chief Financial Officer

General Counsel

Contracts Manager

Royalty Administration 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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