Trademark and patent licensing agreements

The agreement identifies the trademark or patent number, owner, territory and authorised activities. For trademarks, goods and services must align with sales channels; for patents, the technology and exploitation stages must be defined.

A licence may be exclusive, non-exclusive or sole, with exclusivity varying by territory, product, industry or channel. Undefined terms may create incompatible expectations about competition by the owner or granting other licences.

The price may combine an initial fee, guaranteed minima and a sales percentage. The formula must define the calculation basis, discounts, returns, currency, taxes and revenue-recognition timing.

• Reporting: frequency, format and responsible persons.
• Audit: record access, notice, costs and discrepancy thresholds.
• Guaranteed minimum: a condition for exclusivity or retaining the territory.
• Sublicences: approval, minimum conditions and licensee liability.
• Tax: withholding, invoicing and documents for cross-border payments.

For trademark licensing, quality standards, packaging approval and communication rules protect the brand’s origin function and reputation. The owner must be able to intervene proportionately where use is misleading or non-compliant.

For patents and know-how, confidentiality, information security and restrictions on reverse engineering or disclosure must align with applicable law. Improvements developed by the licensee and rights to them require a separate clause.

The agreement must regulate stock, promotional materials, domains, digital accounts and cessation of sign use. A sell-off period may be acceptable if limited and controlled.

The licensee must cooperate in removing local registrations, transferring channels and handing over confidential information. Audit, payment and liability obligations may survive termination.