Royalty Bearing License for Nigeria

Royalty Bearing License Template for Nigeria

A comprehensive legal agreement governed by Nigerian law that establishes the terms and conditions under which a licensor grants rights to use intellectual property, technology, or other proprietary assets to a licensee in exchange for royalty payments. The agreement must comply with Nigerian regulations, particularly the National Office for Technology Acquisition and Promotion (NOTAP) requirements, and includes provisions for payment calculations, reporting obligations, quality control, and technology transfer terms. It addresses both domestic and international licensing arrangements while ensuring compliance with Nigerian foreign exchange regulations and tax requirements.

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What is a Royalty Bearing License?

The Royalty Bearing License Agreement is essential for businesses and individuals seeking to monetize their intellectual property or technology rights in Nigeria while maintaining control over their usage. This document is particularly relevant when entering into licensing arrangements that involve ongoing payments based on usage, sales, or other metrics. The agreement must comply with Nigerian law, including NOTAP regulations for technology transfer, foreign exchange rules for international payments, and relevant tax provisions. It's commonly used in various scenarios including technology transfers, patent licensing, trademark licensing, and copyright licensing. The document includes detailed provisions for calculating and paying royalties, reporting requirements, quality control measures, and protection of intellectual property rights. It's structured to accommodate both domestic and international licensing arrangements while ensuring compliance with local regulatory requirements.

What sections should be included in a Royalty Bearing License?

1. Parties: Identification of the licensor and licensee with their full legal names, registration details, and addresses

2. Background: Context of the agreement, brief description of the licensed rights, and parties' authority to enter into the agreement

3. Definitions: Detailed definitions of key terms used throughout the agreement, including Licensed Rights, Territory, and Royalties

4. Grant of License: Scope of the license, including whether exclusive or non-exclusive, territory, and field of use restrictions

5. Royalty Payments: Payment terms, calculation method, reporting periods, and payment mechanics including currency and method

6. Record Keeping and Audit Rights: Licensee's obligations to maintain records and licensor's rights to audit

7. Quality Control: Standards and requirements for use of the licensed rights

8. Intellectual Property Ownership: Confirmation of ownership rights and handling of improvements or modifications

9. Representations and Warranties: Standard warranties regarding ownership, authority to license, and non-infringement

10. Term and Termination: Duration of the agreement and grounds for termination

11. Confidentiality: Protection of confidential information exchanged during the agreement

12. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for disputes

13. General Provisions: Standard boilerplate clauses including assignment, notices, and entire agreement

What sections are optional to include in a Royalty Bearing License?

1. Minimum Royalty Guarantees: Used when the licensor requires minimum guaranteed payments regardless of actual sales

2. Sub-licensing Rights: Include when the licensee is permitted to grant sub-licenses

3. Technology Transfer: Required when the license includes transfer of technical knowledge or training

4. Export Controls: Necessary for licenses involving regulated technologies or international trade

5. Development Obligations: Include when the licensee must develop or commercialize the licensed technology

6. Marketing and Promotion: Used when specific marketing requirements or restrictions apply

7. Competition Law Compliance: Include specific provisions to ensure compliance with competition laws

8. Force Majeure: Detailed force majeure provisions for high-value or critical licenses

9. Local Content Requirements: Include when Nigerian local content laws apply to the licensed activity

What schedules should be included in a Royalty Bearing License?

1. Licensed Rights: Detailed description of the intellectual property being licensed, including registration numbers

2. Royalty Calculation Method: Detailed formula and examples for calculating royalties

3. Technical Specifications: Technical details and standards for the licensed technology or products

4. Quality Control Standards: Specific quality requirements and testing procedures

5. Reporting Template: Standard format for royalty reports and sales declarations

6. Approved Sub-contractors: List of approved manufacturers or service providers if applicable

7. Territory Definition: Detailed description of geographic territories and any exclusions

8. Training and Support: Details of any technical support or training to be provided

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

Nigeria

Publisher

Genie AI

Document Type

License Agreement

Sector

IP

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Technology and Software

Manufacturing

Oil and Gas

Pharmaceuticals

Entertainment and Media

Telecommunications

Agriculture

Education

Healthcare

Renewable Energy

Mining

Consumer Goods

Automotive

Chemical Industry

Relevant Teams

Legal

Intellectual Property

Finance

Business Development

Research and Development

Commercial

Compliance

Tax

Technology Transfer

Innovation

Operations

Relevant Roles

Legal Counsel

Intellectual Property Manager

Chief Technology Officer

Business Development Manager

Finance Director

Licensing Manager

Commercial Director

Research and Development Director

Chief Executive Officer

Contract Manager

Technology Transfer Officer

Innovation Manager

Compliance Officer

Tax Manager

Industries
Patents and Designs Act (Cap P2, LFN 2004): Governs the protection of patents and industrial designs in Nigeria, crucial for licensing agreements involving patented technologies or designs
Copyright Act (Cap C28, LFN 2004): Regulates copyright protection and licensing of creative works, essential if the license involves copyrightable materials
Trademarks Act (Cap T13, LFN 2004): Controls the registration and use of trademarks, relevant if the license includes trademark rights
Companies and Allied Matters Act 2020: Primary legislation governing business operations and corporate entities in Nigeria, relevant for establishing the parties' legal capacity
Nigerian Investment Promotion Commission Act: Regulates foreign investments and technology transfer agreements in Nigeria
Foreign Exchange (Monitoring and Miscellaneous Provisions) Act: Governs foreign exchange transactions and international payments, crucial for cross-border royalty payments
Companies Income Tax Act: Regulates taxation of corporate entities, including the treatment of royalty payments and withholding tax obligations
National Office for Technology Acquisition and Promotion (NOTAP) Act: Requires registration of technology transfer agreements and regulates payment of royalties to foreign licensors
Federal Competition and Consumer Protection Act 2018: Ensures that licensing agreements do not contain anti-competitive clauses or abuse market dominance
Evidence Act 2011: Governs the admissibility of evidence in Nigerian courts, relevant for contract enforcement and dispute resolution
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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