Patent and Know-How Licence Agreement
This agreement grants a licence to use specified patent rights and associated confidential know-how for defined purposes, subject to restrictions on use, confidentiality, performance and payment. It covers the disclosure, protection and exploitation of intellectual property while preserving ownership, controlling improvements and providing mechanisms for enforcement, termination and registration.
Important notes:
Competition law: Consider UK and EU competition law when granting exclusive licences or imposing field, territory, sublicensing or no-challenge restrictions, particularly if parties are competitors.
UKIPO registration: A licence of UK patent rights should be registered at the UK Intellectual Property Office to ensure enforceability against third parties - see Schedule 3.
Tax and VAT: Make sure to take tax advice on the VAT treatment of licence fees and royalties (particularly cross-border payments or bundled services).
Improvements and inventions: Where Improvements may be created by employees/contractors, ensure separate agreements are in place to secure ownership of such IP.
Export controls and sanctions: Ensure compliance with applicable export control and trade sanctions laws if disclosing or using outside the UK.
Confidentiality: To preserve trade secret protection, ensure Know-How is disclosed only to persons subject to effective confidentiality obligations (including those in Schedule 2).
This agreement should be used where a party wishes to license patented technology together with associated confidential know-how, particularly where the patents alone are insufficient to enable effective commercial exploitation. It is suitable for commercialisation, manufacturing, development or distribution arrangements where ownership of the intellectual property is to be retained by the licensor, but controlled rights of use are granted under UK law.
Patent and Know-How Licence Agreement
This Patent and Know-How Licence Agreement (the "Agreement") is made on [effective date] by and between:
(1) [licensor name], a [legal form of licensor] of [licensor address] (the "Licensor"); and
(2) [licensee name], a [legal form of licensee] of [licensee address] (the "Licensee").
(each a "Party" and together the "Parties").
Definitions and Interpretation
Definitions
In this Agreement, unless the context otherwise requires:
"Affiliate" means, in relation to a party, any entity that directly or indirectly controls, is controlled by, or is under common control with that party, where control means ownership of more than 50% of the voting rights.
"Business Day" means a day other than a Saturday, Sunday or public holiday in England.
"Confidential Information" has the meaning given in clause 4.1.
"Effective Date" has the meaning given above.
"Improvements" means any enhancement, modification or development to the Licensed Patents or Licensed Know-How, whether patentable or not.
"Licensed Field" means [description of field of use].
"Licensed Patents" means the patents and patent applications listed in Schedule 1, together with any continuations, continuations-in-part, divisional applications, reissues, re-examinations and extensions thereof.
"Licensed Products" means products or processes that fall within the scope of the Licensed Patents or that use the Licensed Know-How.
"Licensed Territory" means [licensed territory].
"Licensed Know-How" means all technical, commercial or practical information, data, drawings, designs, formulae, specifications, processes and other know-how owned or controlled by the Licensor and necessary or useful to exploit the Licensed Patents or Licensed Products.
"Net Sales" means gross invoiced sales of Licensed Products less [applicable deductions for net sales].
Interpretation
References to statutes include those statutes as amended or re-enacted.
Clause and Schedule headings do not affect interpretation.
References to including are without limitation.
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England & Wales note
This version is drafted for England & Wales. Scotland and Northern Ireland differ on some points — for example notice periods and tribunal procedure. Tell GitLaw where you hire and it adjusts the draft.
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