License And Supply Agreement Template for the Philippines

A License and Supply Agreement is a comprehensive commercial contract that combines intellectual property licensing with product supply arrangements under Philippine law. You'll use this document when your business needs to grant rights to intellectual property while maintaining control over product supply, distribution, and quality standards within the Philippines market.

When do you need this document?

You need this agreement when establishing manufacturing partnerships where you license technology to a Philippine company that will also supply products back to you or to specified markets. Technology companies frequently use this structure when partnering with local manufacturers who need access to proprietary processes, designs, or patents. Pharmaceutical companies rely on these agreements when licensing formulations to local manufacturers while maintaining supply relationships for finished products. Franchise operations often require this document when granting territorial rights alongside product supply obligations. International brands entering the Philippine market through local partners use these agreements to protect their intellectual property while ensuring consistent product supply and quality control.

Key legal considerations

Your agreement must clearly define the scope of intellectual property rights being licensed, including patents, trademarks, trade secrets, and know-how covered under the Intellectual Property Code of the Philippines. You need robust quality control provisions that specify product standards, inspection rights, and remedies for non-compliance to protect your brand and meet Consumer Act requirements. Territory and exclusivity clauses require careful drafting to avoid anti-competitive issues under the Competition Act while protecting your market interests. Payment terms must address both licensing fees and supply pricing, including currency provisions and tax obligations under the National Internal Revenue Code. Termination clauses should specify how intellectual property rights revert and how existing supply obligations are handled. You must include dispute resolution mechanisms that comply with Philippine commercial law and consider arbitration clauses for complex intellectual property disputes.

Legal requirements in Philippines

Under Philippine law, your License and Supply Agreement must comply with the Civil Code's contract formation requirements, including proper offer, acceptance, and consideration. The Intellectual Property Code mandates that certain license agreements be registered with the Intellectual Property Office of the Philippines, particularly for patents and registered trademarks. Foreign companies must ensure compliance with the Foreign Investments Act if the arrangement involves restricted business activities or foreign ownership limitations. Your agreement must address tax withholding obligations on royalty payments under the National Internal Revenue Code, including potential treaty benefits for foreign licensors. Competition law compliance requires avoiding price-fixing arrangements or territorial restrictions that substantially lessen competition in relevant markets. Consumer protection provisions must ensure that supplied products meet Philippine safety and quality standards as mandated by the Department of Trade and Industry regulations.