License Agreement – exclusivity, royalty, IP and key terms and conditions
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Short answer: A license agreement determines how a party may use another party's intellectual property or know-how. The agreement should specify exactly what is being licensed, whether the license is exclusive, the territory, field of use, duration, royalty, reporting, sub-licensing, quality control, infringement, improvements, and what happens when the license terminates.
| Rights | Identify patent, trademark, copyright, software, databases, or know-how as precisely as possible. |
| Scope | Exclusive, non-exclusive, or sole license; territory and field of use. |
| Compensation | Fixed fee, royalty, minimum royalty, or a combination. |
| Control | Reporting, auditing, and quality requirements should correspond to how royalty and trademarks are used. |
What is being licensed?
The first step is to define the licensed object. A general term such as "all technology" or "the trademark" may be too vague. Provide registration numbers, software versions, documentation, know-how, or other identifiers whenever possible.
Exclusivity, territory, and field of use
An exclusive license may grant the licensee sole rights within a certain area, but exactly what the exclusivity encompasses must be described. Define geography, industry, customer segments, and sales channels. In the case of far-reaching market restrictions, competition law should be analyzed.
Royalty and reporting
- royalty basis: turnover, number of units, users, or other metric,
- what deductions may be made,
- reporting period and payment date,
- currency and tax,
- right to audit or inspect.
Improvements and new development
License collaborations often lead to further development. The agreement should distinguish between rights that existed prior to the agreement and results developed during the collaboration. Specify who owns improvements and what right the other party has to use them.
Infringement and enforcement
Determine who monitors for infringement, who is allowed or obligated to act against third parties, how costs are shared, and how any damages or settlement amounts are handled.
Termination
When the license terminates, the agreement should address whether the licensee may sell off inventory, how software and documentation should be deleted or returned, how trademark usage is stopped, and which confidentiality rules continue to apply.
License Agreement 2026/2027 – Swedish and English
The template package is intended for B2B licensing of, among other things, software, copyright, trademarks, patents, and know-how.
FAQ
What is the difference between an exclusive and a non-exclusive license?
With an exclusive license, the licensor's ability to grant the same rights to others within the agreed scope is restricted. A non-exclusive license can be granted to several parties.
Should the licensee be allowed to sub-license?
Only if the agreement permits it. In that case, regulate which recipients may be sub-licensed and which terms must be passed on.
Can a license agreement violate competition law?
Yes, certain restrictions on price, territory, customers, or competing technology may need to be assessed under Swedish and EU competition law.
This article provides general information and does not replace individual legal advice. Regulations, collective agreements, industry terms, and the circumstances of each individual case may affect the assessment.
