Licensing Agreement Template and How to Draft One (2026)

What is a licensing agreement, and when do you need one? A licensing agreement lets one party (the licensor) grant another (the licensee) permission to use intellectual property, such as a trade mark, patent, copyright work, software or brand, in return for payment, while the licensor keeps ownership. You need one whenever you let someone else use your IP, or use someone else's, without selling it outright: licensing a brand to a manufacturer, letting a publisher use your content, allowing a partner to make a patented product, or franchising a character for merchandise. The core idea is simple: a licence is permission, not a sale. The licensor still owns the IP. The agreement defines exactly what the licensee may do, where, for how long, and at what price, and what happens when it ends. Below is a licensing agreement template you can copy and adapt, followed by plain-English guidance on how to fill each clause. This is general information, not legal advice. IP licensing can be high value and technical, so have a qualified lawyer review your final document. ## Licensing agreement template ```

LICENSING AGREEMENT This Licensing Agreement ("Agreement") is made on [DATE] BETWEEN: [LICENSOR LEGAL NAME], [registration / address] ("Licensor") AND [LICENSEE LEGAL NAME], [registration / address] ("Licensee") 1. DEFINITIONS "Licensed IP" means [describe the trade marks / patents / copyright works / software, with registration numbers where relevant]. "Territory" means [countries or regions]. "Field of Use" means [the products, markets or purposes allowed]. 2. GRANT OF LICENCE The Licensor grants the Licensee a [exclusive / sole / non-exclusive], [non-transferable], [non-sublicensable] licence to use the Licensed IP in the Territory, within the Field of Use, for the Term. The Licensor retains all ownership of the Licensed IP. 3. TERM This Agreement starts on [START DATE] and continues for [PERIOD] / until [END DATE], unless ended earlier under clause 9. [State renewal terms if any.] 4. FEES AND ROYALTIES The Licensee will pay: (a) an upfront fee of [CURRENCY] [AMOUNT]; and/or (b) a royalty of [RATE]% of [net sales / gross revenue] of Licensed Products, with a minimum royalty of [CURRENCY] [AMOUNT] per [period]. Royalties are reported and paid [frequency], with statements the Licensor may audit. Taxes such as GST/VAT and any withholding tax are handled as set out in clause 10. 5. QUALITY CONTROL The Licensee will meet the Licensor's quality standards for any goods or services using the Licensed IP, and will allow the Licensor to inspect samples. The Licensee will use the Licensed IP only in the approved form and with any required notices. 6. INTELLECTUAL PROPERTY The Licensor owns the Licensed IP and any goodwill from its use flows to the Licensor. The Licensee will not register, or try to register, the Licensed IP or anything confusingly similar, and will tell the Licensor of any suspected infringement by a third party. 7. IMPROVEMENTS [State who owns improvements, adaptations or derivative works created during the Term, and any licence back to the other party.] 8. WARRANTIES AND LIABILITY The Licensor warrants it owns or controls the Licensed IP and may grant this licence. Neither party is liable for indirect or consequential loss, and each party's liability is capped at [the fees/royalties paid in the preceding 12 months], except for IP infringement, breach of confidentiality, or liability that cannot be limited by law. 9. TERMINATION Either party may end this Agreement for a material breach not fixed within [N] days of notice, or on the other's insolvency. On termination the licence ends, the Licensee stops all use of the Licensed IP, and [sells down remaining stock within [N] days / ceases immediately]. 10. TAX, GOVERNING LAW AND GENERAL Each party bears its own taxes; withholding tax is applied as law requires. This Agreement is governed by the laws of [JURISDICTION], with disputes resolved by [courts of [PLACE] / arbitration seated in [PLACE]]. This Agreement is the entire agreement and may be changed only in writing. SIGNED: Licensor: ____________________ Date: __________ Licensee: ____________________ Date: __________