Head of practice
Attorney. Specialist in commercial and labor law. Over 16 years of experience in legal support of businesses - debt recovery, contract enforcement, recovery of damages, commercial property and lease disputes.
License agreement
In business, there is often a need to protect intellectual property rights (inventions, trademarks, software, works of art, etc.) and to be able to transfer the right to use them to third parties. For this, licensing is used – a mechanism that not only protects intellectual property rights, but also allows you to receive additional profit.
If a company or individual owns the rights to an intellectual property object, but does not have the ability or desire to use it independently, additional financial income can be obtained by selling the rights to use it to other persons through a licensing mechanism.
The concept of “license agreement”
According to the Civil Code of Ukraine, a license agreement is an agreement under which the licensor grants the licensee (the parties to the agreement) permission to use objects of intellectual property rights. This means use in certain ways in a specifically defined territory and for a certain period of time.
According to such an agreement, the obligation to pay money as payment for the use of the object falls on the licensee.
Object and benefits of a license agreement
Permission to use creativity is the subject of a license agreement.
By properly drafting a license agreement, with the involvement of a lawyer, all parties will receive the following benefits:
- Receiving cash in the form of profit when transferring the rights to use intellectual property to another person with the possibility of increasing it
- Protection by law of intellectual property by determining the conditions of its use
- Favourable terms of cooperation, which will improve the state of business by expanding the list of companies and individuals who have access to intellectual property
Types of licenses
| License type | Features | Legal restrictions |
|---|---|---|
| Exceptional | The most common form | Maximally restricts the licensor’s rights |
| Single | Medium level of restrictions | Partially restricts the rights of the licensor |
| Non-exclusive | Minimum restrictions | Retains most rights with the licensor |
| Forced | Article 1108 of the Civil Code of Ukraine provides | Determined by law |
| Open | Article 1108 of the Civil Code of Ukraine provides | Determined by law |
An exclusive license dominates the total number of concluded license agreements. It is the most advantageous option for the licensee, since he can use the object of the license as profitably as possible in material terms. This agreement should be concluded with the involvement of a lawyer, because he can use the subtleties that only a specialist understands.
This type of license limits the licensor’s rights as much as possible. That is, he is deprived of the opportunity to independently or indirectly use a certain object of intellectual property within the limits specified by this license.
However, the licensor has the right outside the license to use the object of intellectual property at its own discretion or to grant licenses to other persons.
Scope of use of the license agreement
It is important that the parties specify to which areas the license applies, as well as their scope. Areas of use are a general term that refers to different ways of using intellectual property.
Key aspects of areas of use:
- A clear listing of all permitted uses
- The wording should clearly indicate the permitted uses of the work
- Rights not specified in the agreement are considered not granted
- The licensee is granted only the rights specified in the agreement
Types of payments under a license agreement
Mandatory types of payments:
- Lump sum payment:
- Fixed amount
- Payable after the end of the calendar period
- Does not depend on actual usage
- Royalty:
- Recurring payments
- Size depends on the licensee’s percentage of profit
- Possibility of setting variable rates
- Linked to sales or usage volumes
The parties to a publishing license agreement have the right to agree on variable rates. For example, the remuneration directly depends on sales, the percentage rate will be significantly higher if more copies are sold.
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Important elements of the contract
The main elements that must be present in a license agreement:
- Precise definition of the subject of the contract
- List of ways to use the object
- Territory of the license
- Term of the contract
- Amount and procedure for payment of remuneration
- Rights and obligations of the parties
- Liability for violation of the terms
The number of conflict situations between the parties to the agreement depends on how competent the approach to drafting the licensing agreement is.
If you need to develop a license agreement taking into account the specifics of your business, analyze existing agreements for risks and compliance with legislation, provide professional support during negotiations and conclusion of any types of agreements, fill out the application below and our lawyer will contact you shortly.
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1 question
Do you already have a valid license agreement?
2 question
Do you plan to act as a licensor (grant rights of use)?
3 question
Is the use of intellectual property rights outside Ukraine envisaged?
Is a subscriber form of service possible to quickly resolve issues as they arise?
Yes, of course, we take companies for permanent support.
The subscription form of service allows you to receive a full range of legal services on an ongoing basis for a fixed monthly fee.
Our lawyers will accompany all economic legal relations of your company: from drawing up contracts and solving corporate issues to representing interests during inspections by regulatory bodies and in court disputes.
We have very flexible pricing, so contact us and we will discuss your specific case.
Do you work only in Kyiv?
Fortunately, modern technologies allow us to effectively solve almost any legal issue online regardless of your location. In cases where personal presence is necessary, our lawyers are ready to travel to any point in Ukraine. Moreover, thanks to our network of reliable partners abroad, we can provide legal support even in international cases. Our goal is to provide you with quality legal assistance wherever you are.
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during the day
Compensation for moral, material damage
Protection of honour, dignity, and business reputationContract Development for Business and Legal Entities
Licensing of business activities
Compensation for moral, material damage
Legal services in the field of cryptocurrency and blockchain
REGISTRATION OF COMPANIES AND OPENING OF BANK ACCOUNTS
Sale and purchase of ready-made firms
Grants and attracting investment
Business registration and support in Great Britain
Business registration and support in Switzerland
Business registration and support in the EU
Business Registration and Support in the Gulf Countries (GCC)
Business registration and support in Turkey
Business registration and support in USA
Lawyer for administrative cases
Legal services for medical businesses and doctors
Protection of honour, dignity, and business reputation
Real estate transaction support
Escort of the tender participant
Trial lawyer: support and defense in court
European Court of Human Rights (ECHR)
