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Licensing and Royalty Agreement template
Licensing and Royalty Agreement sample


What is Licensing and Royalty Agreement?

Licensing and Royalty Agreement A Licensing and Royalty Agreement grants a licensee the rights to use certain intellectual property in exchange for royalty payments, specifying licensing terms and payment details.



Sample template:



Licensing and Royalty Agreement


between


Creative Innovations Inc.



("Licensor")



and


GlobalTech Solutions LLC



("Licensee")



1. License Grant

1.1. Grant of License


Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee, a non-exclusive, non-transferable, limited license to use, reproduce, distribute, and sublicense the proprietary software “InfoGuard Pro” ("Software") designed for data security and management.



2. Royalty Payments

2.1. Royalty Rate


Licensee shall pay to Licensor a royalty for the use and distribution of the Software under this Agreement at the rate of fifteen percent (15%) of the gross revenue received by Licensee from the sale or licensing of the Software ("Royalty").



2.2. Payment Frequency


Royalties shall be paid by Licensee to Licensor quarterly, within thirty (30) days after the end of each calendar quarter, along with a written statement detailing the number of copies of the Software sold or licensed, gross revenues derived therefrom, and the calculation of the Royalty amount.



3. Usage Restrictions

3.1. No Modification


Licensee shall not modify, adapt, translate, reverse engineer, decompile, disassemble, or create derivative works based on the Software without the prior written consent of Licensor.



3.2. No Transfer


Licensee shall not transfer, sublicense, rent, lease, or lend the Software to any third party except as expressly authorized in this Agreement.



3.3. Proprietary Notices


Licensee shall not remove, alter or obscure any copyright, trademark, or other proprietary notices, legends, symbols, or labels appearing on or in the Software.



4. Intellectual Property Rights

Licensee acknowledges that Licensor retains all right, title, and interest in and to the Software, any modifications thereof, and any related documentation. Licensee shall not take any action or make any claim to the contrary and shall not use any of Licensor's intellectual property rights or proprietary information, including but not limited to the Software, trademarks, and trade secrets, except as expressly permitted by this Agreement.



5. Term and Termination

5.1. Term


This Agreement shall commence upon its execution by both parties and shall continue until terminated in accordance with the provisions of this Agreement.



5.2. Termination


Either party may terminate this Agreement upon written notice in the event of: (a) a material breach by the other party of any provision of this Agreement, which breach has not been cured within thirty (30) days after receipt of written notice of the breach; or (b) the other party becomes insolvent or otherwise unable to meet its obligations under this Agreement.



6. Governing Law and Dispute Resolution

6.1. Governing Law


This Agreement shall be governed by and construed in accordance with the laws of the United States of America and the laws of the state of Delaware, without regard to its principles of conflict of laws.



6.2. Dispute Resolution


Any dispute or claim arising out of or concerning this Agreement shall first be negotiated in good faith between the parties. If the parties cannot resolve the dispute or claim within thirty (30) days of the commencement of negotiations, the dispute shall be submitted to binding arbitration and resolved in accordance with the rules of the American Arbitration Association, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.



7. Miscellaneous

7.1. Amendments


No amendment, modification, or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties. Any such modification shall apply only to the specific instance and for the specific purpose addressed.



7.2. Entire Agreement


This Agreement constitutes the entire understanding and agreement between the parties with regard to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written communications relating thereto.



7.3. Severability


If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions shall remain in full force and effect and the provision so held invalid or unenforceable shall be modified so as to give effect to the original intent as nearly as possible.



7.4. Counterparts


This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument.



IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.



Creative Innovations Inc.



By: _______________________________



Title: ______________________________



GlobalTech Solutions LLC



By: _______________________________



Title: ______________________________

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Sections of a Licensing and Royalty Agreement


In this Licensing and Royalty Agreement, you will see the following sections:

  1. License Grant
  2. Royalty Payments
  3. Usage Restrictions
  4. Intellectual Property Rights
  5. Term and Termination
  6. Governing Law and Dispute Resolution
  7. Miscellaneous


Going indepth - Analysis of each section:

  1. License Grant : This section explains that the Licensor (Creative Innovations Inc.) is giving the Licensee (GlobalTech Solutions LLC) permission to use, reproduce, distribute, and sublicense their software, InfoGuard Pro, under certain conditions. Think of it like lending someone your car with specific rules on how they can use it.

  2. Royalty Payments : This part outlines how the Licensee will pay the Licensor for using and distributing the software. The Licensee will pay 15% of the money they make from selling or licensing the software to the Licensor. Payments will be made every three months, along with a report on how many copies were sold and the total revenue generated.

  3. Usage Restrictions : This section sets limits on what the Licensee can and cannot do with the software. They cannot modify or reverse-engineer the software, transfer it to others without permission, or remove any copyright or trademark notices. It's like having rules for how you can use someone's car, such as not painting it a different color or lending it to someone else without permission.

  4. Intellectual Property Rights : This part states that the Licensor still owns all rights to the software, including any modifications and related documentation. The Licensee cannot claim ownership or use any of the Licensor's intellectual property (like trademarks or trade secrets) without permission. It's like acknowledging that the car you're borrowing still belongs to the owner, and you can't claim it as your own or use their custom license plate.

  5. Term and Termination : This section explains how long the agreement lasts and how it can be ended. The agreement starts when both parties sign it and continues until it's terminated according to the rules outlined here. Either party can end the agreement if the other party breaks the rules or becomes unable to fulfill their obligations. It's like having a set time for how long you can borrow someone's car and rules for when the owner can take it back.

  6. Governing Law and Dispute Resolution : This part states that the agreement is governed by the laws of the United States and the state of Delaware. If there's a disagreement between the parties, they'll first try to work it out themselves. If they can't, they'll go to binding arbitration (a private way to resolve disputes) under the American Arbitration Association's rules. It's like agreeing to follow the local traffic laws and having a plan for resolving any disputes that might come up while using the car.

  7. Miscellaneous : This section covers various additional terms, such as how the agreement can be amended (only in writing and signed by both parties), that it's the entire agreement between the parties, and that if any part of the agreement is found to be invalid, the rest of the agreement still stands. It also states that the agreement can be signed in multiple copies, which will all be considered original. It's like having a catch-all for any other rules or details that don't fit into the other sections.

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