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Rajah Lehal

Blog Bite: Do you understand the nature of the IP that is being transferred?

January 23, 2016

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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.

Take away:

  • 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.
Intellectual Property
Definition of Intellectual Property
Licence Restrictions
Grant of Licence
Commercial Activities
IP Transfer

Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.