What Is A License Agreement And How Does It Compare To A Standard Sales Contract?
Q. What exactly is a license agreement for the use of intellectual property, and how does it differ from a standard sales contract? — LORRAINE A. That is an excellent question. An intellectual property license agreement is an agreement, which provides a licensee certain exclusive or nonexclusive rights to use intellectual property owned by the licensor pursuant to certain agreed upon terms and conditions. The typical intellectual property license will include provisions for the payment of compensation, often referred to as a royalty, and will provide for the continued protection of the intellectual property rights to be licensed under the agreement. The key difference between an intellectual property license agreement and a standard sales contract is the purpose of the agreement. The purpose of an intellectual property license agreement is generally to enable the commercialization of the intellectual property owned by the licensor and to define the terms and conditions of the license
