Licences are one of the most common forms of intellectual property related agreements. They grant a party the right to use all or a part of intellectual property that it does not own. Licenses can increase revenue by generating income from markets that the IP owner can not or does not want to access. The licence terms need to be carefully defined and must clearly include:
- what intellectual property rights are being licensed;
- what the licensee is authorised to do;
- what the licensee is not authorised to do;
- what happens if the licensee further develops the intellectual property covered by the licence;
- what the payment structure and terms are;
- how long the licence will remain in effect;
- under what circumstances the licence can be cancelled.