Licensing - In Plain Language
What is a License?
Put simply, a license gives you the right to do something or to use something owned by someone else.
For example, to legally drive a car you need to get a driver’s license. To use or sell someone else’s products or intellectual property, you may need a license from that person.
What’s in a License?
In business, a license is typically set out in a written contract called a license agreement, which describes the license being granted by one person to another. For example:
What is being licensed?
What can you do with the license?
What can you not do with the license?
Are you paying for the license? And if so, how much?
How long is the license for?
Is there a geographic limit to the license (e.g., do the rights granted apply only in BC)?
Are you the only person that can be granted the license, or can other people receive the same license as you?
License agreements are not “one-size-fits-all”, so it is important that you work with your lawyer to draft the agreement that reflects the structure you’re wanting to commercialize.
Licensing vs. Selling
It’s also important to keep in mind that licensing something is not the same as selling something. In a sale there is a transfer of ownership from one person to another. However, in a license there is no transfer of ownership.
Ink LLP is a business law firm that acts as strategic counsel to ambitious entrepreneurs, investors, and high-growth companies. Contact one of our lawyers to discuss your business and how our team might be able to help you tackle the challenges of your business and the opportunities for growth.
This information is provided for informational purposes only and is not legal advice.