Intellectual Property Licensing Agreements: A Brief Overview

What is an Intellectual Property (IP) Licence? 

A licence serves as a formal agreement between two parties. As such, an IP licensing agreement involves the owner of the IP (the licensor) giving someone else (the licensee) the authorisation to use, without ownership, their intellectual property in return for payment. 

This can include the usage of: 

  • trade marks; 
  • original works subject to copyright; and 
  • patented inventions. 

 

 

Why Would I Licence my IP? 

Opting to licence your IP can offer significant financial advantages. This is achieved by gaining a financial return by allowing others to use your IP. Additionally, licensing presents a valuable opportunity to venture into new markets and foster partnerships with previously untapped entities. 

 

 

Are There Different Licenses I Should Be Aware Of? 

Yes, there are four types of licenses that you should know about. These include: 

 

1.Exclusive Licence: 

An exclusive license is granted when one person or business is given the sole right to commercialise your IP, excluding you and others from using it for profit. However, this exclusivity can be tailored by imposing restrictions on the licence, such as confining it to:

  • A specific geographical area, 
  • A defined field of application, 
  • A particular class of product. 

 

2. Non-Exclusive Licence 

A non-exclusive license for IP grants permission to multiple individuals or entities to use the IP simultaneously. Under this agreement, the IP owner maintains the right to license the same IP to others and use it themselves. 

 

3. Sole Licence 

A sole license represents a blend of both exclusive and non-exclusive licensing. It occurs when one person or business is authorised to use your IP, while you maintain the option to commercialise specific elements of it yourself. 

 

4. Compulsory Licence 

Under unique circumstances, Australian enterprises have the option to request a compulsory license for a Patented Pharmaceutical Invention (PPI). This license grants them the ability to produce generic versions of patented medications for export to countries facing a pressing need. 

 

 

Key takeaways 

  • Intellectual property licensing agreements can offer significant financial advantages and increase brand exposure. 
  • License agreements can either be exclusive, non-exclusive, sole or compulsory. 

 

 

Gladwin Legal are experts in Intellectual Property Law and have extensive experience in advising businesses. If you require assistance in understanding your legal obligations please contact us at or 1300 033 934.