Legal Templates
Intercompany License Agreement

Intercompany License Agreement for South Africa

Intercompany License Agreement Template for South Africa

A comprehensive legal agreement governed by South African law that establishes the terms and conditions under which one company (the licensor) grants another company within the same corporate group (the licensee) the right to use specific intellectual property, technology, or other proprietary assets. The agreement includes detailed provisions for licensing rights, usage restrictions, payment terms, quality control measures, and compliance with South African regulations including intellectual property laws, competition law, and exchange control requirements. It serves as a formal framework for managing intra-group intellectual property and technology transfers while ensuring proper legal and tax compliance within the South African jurisdiction.

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What is a Intercompany License Agreement?

The Intercompany License Agreement is essential for multinational corporations and company groups operating in South Africa who need to formalize the sharing of intellectual property, technology, or other proprietary assets between related entities. This document is particularly important in the South African context due to specific regulatory requirements around intellectual property protection, exchange control regulations, and transfer pricing considerations. The agreement typically covers licensing terms, royalty structures, quality control measures, and compliance requirements while adhering to South African corporate and tax laws. It's commonly used when establishing new operations, restructuring corporate groups, or implementing global IP strategies, and helps demonstrate proper governance and arms-length transactions to regulatory authorities.

What sections should be included in a Intercompany License Agreement?

1. Parties: Identification and details of the Licensor and Licensee companies

2. Background: Context of the agreement, relationship between the parties, and purpose of the license

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Grant of License: Scope, nature (exclusive/non-exclusive), and territory of the license granted

5. Term and Termination: Duration of the agreement and circumstances for termination

6. Payment Terms: License fees, royalties, payment schedule, and calculation methods

7. Intellectual Property Rights: Ownership, protection, and enforcement of IP rights

8. Confidentiality: Protection of confidential information and trade secrets

9. Warranties and Representations: Assurances given by both parties regarding their rights and capabilities

10. Indemnification: Obligations to protect against third-party claims and damages

11. Governing Law and Jurisdiction: Application of South African law and jurisdiction for dispute resolution

12. General Provisions: Standard clauses including notices, amendments, and severability

What sections are optional to include in a Intercompany License Agreement?

1. Quality Control: Standards and requirements for licensed products/services, used when quality maintenance is crucial

2. Sub-licensing Rights: Terms for granting sub-licenses, included when sub-licensing is permitted

3. Technology Transfer: Provisions for technical support and knowledge transfer, needed for technical licenses

4. Competition Compliance: Specific provisions ensuring compliance with competition laws, needed for licenses with market impact

5. Data Protection: POPIA compliance provisions, required when personal data is processed

6. Export Control: Compliance with export regulations, needed for international licensing

7. Improvements: Rights and obligations regarding improvements to licensed IP, relevant for technology licenses

8. Source Code Escrow: Terms for source code protection and access, needed for software licenses

What schedules should be included in a Intercompany License Agreement?

1. Licensed IP: Detailed description of intellectual property being licensed

2. Royalty Calculations: Detailed methodology for calculating royalties and fees

3. Technical Specifications: Technical details and requirements for licensed technology

4. Quality Standards: Specific quality requirements and testing procedures

5. Territory Definition: Detailed description of licensed territory and any restrictions

6. Approved Sub-licensees: List of pre-approved sub-licensees if applicable

7. Service Level Requirements: Performance standards and metrics if applicable

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

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Jurisdiction

South Africa

Publisher

Genie AI

Document Type

License Agreement

Sector

IP

Cost

Free to use
Relevant legal definitions
Affiliate
Agreement
Commencement Date
Confidential Information
Effective Date
Force Majeure
Group
Improvements
Intellectual Property Rights
Know-How
Licensed IP
Licensed Products
Licensed Technology
Licensed Territory
Licensee
Licensor
Net Sales
Parent Company
Patents
Quarter
Regulatory Approvals
Royalties
Subsidiary
Technical Information
Term
Trade Marks
Trade Secrets
Working Day
Year
Gross Revenue
Quality Standards
Related Party
South African Competition Law
Background IP
Foreground IP
Control
Exchange Control Regulations
License Fees
Material Breach
Permitted Purpose
Revenue
Clauses
Parties
Recitals
Definitions
Grant of License
Scope of License
Territory
Sub-licensing
License Fees and Royalties
Payment Terms
Intellectual Property Rights
Quality Control
Technical Support
Confidentiality
Warranties and Representations
Indemnification
Term and Duration
Termination
Effects of Termination
Force Majeure
Assignment
Regulatory Compliance
Competition Law Compliance
Exchange Control
Tax Compliance
Data Protection
Audit Rights
Record Keeping
Improvements
Reports and Inspections
Dispute Resolution
Governing Law
Notices
Severability
Entire Agreement
Amendment
Further Assurance
Costs
Waiver
Counterparts
Relevant Industries

Technology

Manufacturing

Pharmaceuticals

Consumer Goods

Telecommunications

Software

Automotive

Energy

Financial Services

Media and Entertainment

Biotechnology

Industrial

Mining

Retail

Relevant Teams

Legal

Intellectual Property

Corporate Affairs

Finance

Tax

Compliance

Business Development

Research and Development

Technology

Commercial

Relevant Roles

Legal Counsel

Intellectual Property Manager

Corporate Attorney

Licensing Manager

Commercial Director

Chief Legal Officer

Chief Technology Officer

Chief Financial Officer

Tax Director

Compliance Officer

Business Development Manager

Corporate Secretary

General Counsel

IP Rights Administrator

Group Legal Director

Industries
Patents Act 57 of 1978: Governs patent rights, registration, and protection in South Africa. Important for any technology or invention licensing provisions.
Trade Marks Act 194 of 1993: Regulates trademark protection and licensing in South Africa. Essential for brand and trademark licensing aspects.
Copyright Act 98 of 1978: Covers copyright protection and licensing in South Africa. Relevant for any intellectual property aspects of the agreement.
Companies Act 71 of 2008: Regulates corporate entities in South Africa. Important for establishing the legal capacity of parties to enter into agreements.
Competition Act 89 of 1998: Ensures fair competition and prevents anti-competitive practices. Relevant for licensing terms and territorial restrictions.
Exchange Control Regulations: Governs cross-border transactions and payments. Critical for international licensing agreements and royalty payments.
Protection of Personal Information Act (POPIA) 4 of 2013: Regulates the processing of personal information. Relevant if the license involves data transfer or processing.
Consumer Protection Act 68 of 2008: Protects consumer rights. May be relevant if the licensed products/services ultimately reach consumers.
Income Tax Act 58 of 1962: Governs taxation of income, including royalties and licensing fees. Important for tax implications of the agreement.
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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