A thorough understanding of the IP involved in a transaction is an essential first step to drafting an IP transfer or licensing agreement. The nature of the IP will determine the issues that need to be addressed, and will assist in determining the appropriate scope of the licence. It will also determine the structure of payment and/or royalty provisions.

Once the form of IP involved has been identified, then it is possible to include a clear specification and definition of the IP that will be licensed under the IP licence agreement.

Careful attention should be given to the rights the licensee wishes to obtain, and the rights the licensor wishes to retain when drafting the grant of the licence. The business objectives and outcomes of both parties will help to determine the scope of the licence.

This article discusses considerations including the use granted, territory, term, exclusivity, revocability, sub-licensing, termination, exclusivity and non-exclusivity, among others.

Takeaway:

• Before drafting an IP transfer or licensing agreement, the drafter should have a thorough understanding of the nature of the types of IP to be covered by the agreement.