An Intellectual Property Licensing Agreement (“IP License Agreement”) is one such intellectual property agreement that is legally binding between an owner of intellectual property ("Licensor") and a party wishing to use that intellectual property for a specific purpose ("Licensee"). Once the Licensor has decided to license its intellectual property, it is important that the terms of the license are captured in writing and directly agreed upon by the parties.  

The purpose of licensing, amongst others, is to enable the owner of IP to receive measurable sums of money based on the licensee's use. The royalty acts as consideration to the owner of the intellectual property for granting the license. 

 What are the major types of intellectual property licensing? 

  1. Exclusive License 

  1. Sole License 

  1. Non-Exclusive License 

What is the difference between IP License and IP Assignment? 

In IP license, the licensee permits the use of IP in a particular way while still retaining interest in the intellectual property being licensed. But in IP assignment, there is a transfer of ownership from the assignor to the assignee. In this case, the assignor will no more hold any interest in the intellectual property once it is assigned to the assignor. 


It has come out to be most structured form of business for global market expansion by fading trade barriers. However, it is crucial for the parties associated with the agreement, to fully understand what the advantages of licensing are and wisely draft the clauses of the agreement. 

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