Sub Licence Agreement Template for New Zealand

A Sub Licence Agreement is a legal document that allows you, as a licensee under an original licence, to grant specific rights to a third party (sub-licensee) while maintaining your obligations under the head licence. This arrangement creates a three-party relationship where rights flow from the original licensor through you to the sub-licensee, with each party maintaining distinct legal obligations and protections.

When do you need this document?

You need a Sub Licence Agreement when your business model involves extending licensed rights to other parties. Technology companies frequently use these agreements when licensing software or patents to distributors who then sub-license to end users. Manufacturing businesses require them when licensing production rights that will be further sub-licensed to regional manufacturers. Franchise operations often use sub-licensing when master franchisees grant rights to individual franchisees. Media and entertainment companies rely on these agreements when content licensees need to grant rights to broadcasters or streaming platforms in specific territories.

Key legal considerations

Your Sub Licence Agreement must carefully align with the terms of your head licence to avoid breaching your original obligations. The scope of rights you can sub-license is limited by what was originally granted to you, and you cannot grant broader rights than you possess. Quality control provisions are crucial, as you remain responsible to the head licensor for the sub-licensee's compliance with standards and restrictions. Payment structures must be clearly defined, including how royalties or fees flow between all parties and whether you retain any profit margin. Termination clauses require special attention since termination of the head licence typically terminates all sub-licences, creating potential liability issues. Territory and field-of-use restrictions from your head licence must be respected and may further limit the sub-licence scope.

Legal requirements in New Zealand

Under New Zealand's Copyright Act 1994, sub-licensing arrangements must comply with the original copyright owner's exclusive rights and any limitations specified in the head licence. The Contract and Commercial Law Act 2017 governs the formation and enforcement of your sub-licence, requiring clear terms, adequate consideration, and proper execution. You must ensure compliance with the Fair Trading Act 1986 by providing accurate representations about the rights being sub-licensed and avoiding misleading conduct. The Commerce Act 1986 may apply if your sub-licensing arrangement could restrict competition or create market dominance issues. Consumer Guarantees Act 1993 protections may extend to sub-licensees in certain circumstances, particularly in business-to-consumer transactions. Your agreement should include New Zealand governing law clauses and specify dispute resolution mechanisms, preferably through New Zealand courts or arbitration. Proper registration requirements must be considered if the sub-licensed intellectual property requires formal registration or notification under New Zealand law.