Patent / Technology License Agreement is a negotiated document created between two parties whereby the Licensor grants the Licensee a wide range of rights (include the right to sub-license) to use the invention / patent works for commercial production. This is drafted in favour of the Licensor.
The Licensor has the rights to certain intellectual property and grants the Licensee a non-transferable exclusive license to use the technology, and the document outlines the conditions of use, disclosing any improvements made by the licensor, protecting the patent, fees and royalties and inspections/statements. The Licensee is required to follow strictly the rules and regulations as listed. As mentioned, this is a document drafted in favour of the Licensor, the requirement of strict adherence is to protect the Licensor’s intellectual property rights.
In consideration of the Licensee observing and performing all of its obligations under this Agreement the Licensor grants to the Licensee a non-transferable non-exclusive licence to develop and commercialise the Licensed Intellectual Property in the Licensed Field on the and conditions of this Agreement in order that the Licensee may manufacture and sell the Licensed Products for the duration of this agreement including the right to sub-license the Licensed Intellectual Property.
The Licensee shall not use the Licensed Intellectual Property in relation to any goods or services other than the Licensed Products during the Term or after it. Any extension to this Agreement to include products other than the Licensed Products shall be at the sole discretion of the Licensor. The Licensee must not use or exploit the Licensed Intellectual Property except as expressly authorised by this Agreement.
Additionally, the agreement concerns research and development pertaining to the Intellectual Property, indemnities, warranties and the termination of the agreement.
Any infringement of the intellectual property rights by a third party would entitle the Licensor and Licensee to file a lawsuit in the jurisdiction that is responsible for this agreement, and the two parties may split the compensation, costs and damages accordingly. However, if the Licensee fails to bring an action, the Licensor may enforce the patents through a lawsuit on his or her own. But in that case, the whole sum of compensation, costs and damages shall belong solely to the Licensor.
On the matter of termination, firstly, there are three possible situations regarding the nature of the term of the agreement. This agreement could be based on a fixed term, a continuing term, or a renewable term. The agreement could be automatically terminated as the term ends and no further agreement is created. Secondly, termination could also be caused by any breach of the agreement terms by or where liquidation or insolvency happens to any of the contractual party.
Confidentiality is of the essence in this agreement. Not only is the Licensee him or herself responsible for maintaining the confidentiality of the Intellectual Property and the terms and conditions in the agreement, but it is also required that any affiliated parties to the Licensee that may have access to the abovementioned information shall keep such confidential. In the case where the Licensee engages in a contract with an independent contractor, where the contractor shall have access to the abovementioned information, the Licensee shall sign with the independent contractor, a Confidentiality Letter as displayed in Exhibit 1 of the agreement, so as to ensure the contractor is also legally bound to the strict terms in this agreement, prevent any potential infringement in the future and protect the interests of both the Licensor and the Licensee.
It shall also be noted that the clauses related to confidentiality in the agreement would survive under any circumstances of termination of this agreement. This is to ensure that there will be no exploitation of the Licensor’s exclusive patent rights after the agreed term of the contract has ended.
This document should be carefully read by the Licensor and the Licensee.
This Patent / Technology Licence Agreement may be used when the Licensor grants the Licensee rights, including rights to sub-license, to use their invention / technology / intellectual property / patent works for commercial production.
Both parties should sign and return a copy, and once signed, both parties should get a copy. To avoid any future disputes, both parties may wish to have their signatures witnessed.
If either party wishes to amend the agreement in the future, both parties should agree to do so, and the original agreement and amendments should be recorded in writing and signed by both parties.
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