Sub Licence Agreement Template for Malaysia

What is a Sub Licence Agreement?

The Sub Licence Agreement is a crucial document used when a licensee of intellectual property rights wishes to grant some or all of those rights to another party in Malaysia. This type of agreement is commonly used in various commercial contexts, such as technology licensing, franchise arrangements, or brand licensing schemes. The document must carefully balance the rights and obligations flowing from the main license agreement with the new sub-licensing arrangement, ensuring compliance with Malaysian intellectual property laws and regulations. It typically includes detailed provisions on scope of use, quality control, payment terms, and territorial restrictions, while maintaining the integrity of the original license agreement. The Sub Licence Agreement is particularly important in Malaysia's growing technology and manufacturing sectors, where intellectual property licensing is increasingly common.

About the Sub Licence Agreement

A Sub Licence Agreement is a legal contract that allows you, as a licensee, to grant some or all of your licensed rights to a third party in Malaysia. This arrangement creates a chain of licensing relationships while ensuring compliance with Malaysian intellectual property laws and the original licensing terms. You'll need this document when you want to monetize your licensed rights or expand market reach through strategic partnerships.

When do you need this document?

You need a Sub Licence Agreement when you hold a license for intellectual property and want to grant rights to another party. Technology companies often use these agreements when licensing software to distributors who then sub-license to end users. Franchise operations require sub-licensing when a master franchisee grants territorial rights to sub-franchisees. Manufacturing businesses use these agreements when licensing production rights to local manufacturers who then sub-license specific product lines. Entertainment companies frequently sub-license content distribution rights to regional broadcasters or streaming platforms. Brand owners may sub-license trademark usage to authorized retailers or promotional partners.

Key legal considerations

Your Sub Licence Agreement must clearly define the scope of rights being granted and any restrictions on use. The agreement should specify whether the sub-license is exclusive or non-exclusive, and outline territorial limitations. Payment terms, including royalties and revenue sharing arrangements, must be clearly established. Quality control provisions are crucial to maintain brand standards and protect the original licensor's interests. You must ensure the sub-licensee's obligations align with your own duties under the main license agreement. Termination clauses should address what happens to the sub-license if your main license ends. Intellectual property warranties and indemnification provisions protect all parties from potential infringement claims. The agreement should include dispute resolution mechanisms and specify governing law.

Legal requirements in Malaysia

Under Malaysian law, your Sub Licence Agreement must comply with the Contracts Act 1950 for basic contract validity and enforceability. The agreement must demonstrate you have proper authority to grant the sub-license under your main licensing agreement. For patent sub-licensing, compliance with the Patents Act 1983 is essential, including proper registration requirements. Trademark sub-licensing must adhere to the Trade Marks Act 2019, ensuring use maintains the trademark's distinctiveness. Copyright sub-licensing arrangements must comply with the Copyright Act 1987, particularly regarding moral rights and attribution. The Competition Act 2010 requires that licensing terms don't contain anti-competitive provisions or abuse market position. Industrial design sub-licensing must follow the Industrial Designs Act 1996 for registered designs. All foreign currency payments must comply with exchange control regulations under Bank Negara Malaysia guidelines.