License Agreements

For many businesses, one of the most valuable assets is intellectual property. As a result of its value, protecting that property is a major concern for business owners. But, allowing limited use of intellectual property can also be important for the growth of a business. In order to allow this use while still retaining protection for the business, license agreements are utilized.


The intellectual property laws provide creators, inventors, and owners of businesses protection for their work or products. Intellectual property includes:

  • Copyright, which provides protection for original works like music or writing;
  • Patent, which provides protection for inventions; and
  • Trademark, which is a unique sign or symbol that identifies that a product or service originated from a specific place (like the “Golden Arches” of the McDonald’s logo).

License agreements allow a rights holder (licensor) to benefit by charging a user (licensee) a fee in exchange for the ability to use the licensor’s intellectual property. For example, a business that has developed software can license use of that software to consumers. For almost all business owners licensing their products, there are some important areas to address in the agreement. For example, the scope of the license and what payment will be received must be considered.

In relation to the scope of the license, a balance must be achieved that permits the licensee to make meaningful use of the property or product, while limiting its use sufficiently to protect the licensor. It is important to make sure that ownership rights over the property are retained. Some other issues related to scope include the length of time the license will last and what uses of the property or product are prohibited.

License agreements are typically non-exclusive, which means the licensor can license use of the product to many people. Consideration should also be given to reproduction rights. For example, some reproduction may be allowed under limited circumstances, such as through a network license or for educational purposes. But, unlimited reproduction is likely not in the best interests of the licensor.

Another major issue in license agreements relates to payment for use of the property. Most fees on end-user consumer software are paid once at the time of purchase (for example, paying for Microsoft Windows at an office supply store). Alternatively, recurring payments can also be agreed to, such as royalties for continuing use.

In the unfortunate event that the intellectual property rights of an owner are infringed upon, enforcement of those rights will be necessary. The owner of such rights can file a lawsuit against the infringing party to enforce the rights, request an injunction against further use, and ask for monetary damages. Damage awards can be actual damages (the amount lost due to the infringement) or the profits the defendant enjoyed as a result of the infringement.

Helping Your Business

For more information about licensing your property, including help with drafting an agreement, speak with an experienced intellectual property attorney today. At the Royse Law Firm, we provide legal representation for businesses in the San Francisco, Los Angeles, and Palo Alto areas. We look forward to hearing from you.

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Roger Royse

Roger Royse, the founder of the Royse Law Firm, works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries. Roger regularly advises on complex tax structuring, high stakes business negotiations and large international financial transactions. Practicing business and tax law since 1984, Roger’s background includes work with prominent San Francisco Bay area law firms, as well as Milbank, Tweed, Hadley and McCloy in New York City.
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