Licensing Agreement Template, Free Download 2026

This License Agreement ("Agreement") is entered into as of [____________] (the "Effective Date") by and between [Licensor Name] ("Licensor") and [Licensee Name] ("Licensee"). Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a [non-exclusive / exclusive / sole] [non-transferable / transferable] [non-sublicensable / sublicensable] license under Licensor's rights in and to [the Licensed Intellectual Property described in Exhibit A] (the "Licensed IP") to [manufacture, use, sell, offer for sale, import, export, and otherwise exploit / use and reproduce / distribute and display] the Licensed IP [solely within the territory described in Exhibit B (the "Territory") / on a worldwide basis] during the Term, solely for the purpose of [____________] (the "Permitted Use"). All rights not expressly granted hereunder are reserved to Licensor.

The license granted herein is expressly limited to the Permitted Use and the Territory. Licensee shall not: (a) use the Licensed IP for any purpose other than the Permitted Use without Licensor's prior written consent; (b) modify, adapt, translate, reverse engineer, decompile, disassemble, or create derivative works based on the Licensed IP without Licensor's prior written consent; (c) sublicense, transfer, assign, pledge, or otherwise encumber the license or any rights thereunder without Licensor's prior written consent [and payment of the sublicense fee specified in Exhibit C]; (d) use the Licensed IP in connection with any illegal activity or in any manner that would disparage, tarnish, or damage the reputation or goodwill associated with the Licensed IP; or (e) remove, alter, or obscure any proprietary notices, labels, or markings on or incorporated in the Licensed IP.

In consideration of the license granted herein, Licensee shall pay Licensor the following royalties and fees: (a) an upfront license fee of $[____________] due upon execution of this Agreement; (b) a running royalty of [____]% of Net Revenue (as defined below) from Licensee's exploitation of the Licensed IP, payable within [____] days after the end of each calendar quarter; and (c) a minimum annual royalty of $[____________] commencing in the [second / third] year of the Term, credited against running royalties earned in the same calendar year. "Net Revenue" means gross revenue actually collected by Licensee from the sale or licensing of products or services incorporating or embodying the Licensed IP, less [returns, refunds, chargebacks, sales taxes collected, and customary trade discounts actually given].

Licensee shall maintain complete and accurate books and records in sufficient detail to permit verification of all royalties and fees payable hereunder, and shall retain such records for not less than [____] years following the end of the calendar year to which they relate. Licensor shall have the right, upon not less than [____] days' prior written notice and no more than [____] times per calendar year, to audit Licensee's books and records to verify the accuracy of royalty reports and payments. If an audit reveals an underpayment of [____]% or more, Licensee shall pay the cost of the audit in addition to the underpayment plus interest at [____]% per annum. All royalty reports shall be accompanied by a certification by an officer of Licensee confirming the accuracy of the reported figures.

Licensee shall use the Licensed IP only in accordance with Licensor's quality standards, specifications, and guidelines as provided by Licensor from time to time (the "Quality Standards"). Licensor shall have the right to inspect and approve, prior to distribution or commercial use, samples of all products, materials, and services incorporating the Licensed IP. Licensee shall promptly remedy any quality deficiency identified by Licensor and shall not distribute or use any product or material incorporating the Licensed IP that does not conform to the Quality Standards. Licensee acknowledges that maintaining the quality and reputation of the Licensed IP is essential to Licensor and that any material failure to comply with the Quality Standards shall constitute a material breach of this Agreement.

As between the Parties, Licensor retains all right, title, and interest in and to the Licensed IP, including all intellectual property rights therein. Nothing in this Agreement shall be construed to transfer any ownership interest in the Licensed IP to Licensee. All goodwill arising from Licensee's use of the Licensed IP shall inure to the benefit of Licensor. Licensee shall cooperate fully with Licensor in the prosecution, maintenance, enforcement, and defense of all intellectual property rights in the Licensed IP, including by executing all documents, providing testimony, and assisting in proceedings as reasonably requested by Licensor at Licensor's expense. Licensee shall promptly notify Licensor in writing of any actual or threatened infringement, misappropriation, or dilution of the Licensed IP of which Licensee becomes aware.

This Agreement shall commence on the Effective Date and shall continue for an initial term of [____] years (the "Initial Term"), unless earlier terminated as provided herein. Following the Initial Term, this Agreement shall [automatically renew for successive one-year terms unless either Party provides written notice of non-renewal not less than [____] days prior to the end of the then-current term / expire unless the Parties agree in writing to extend the term]. Either Party may terminate this Agreement immediately upon written notice if the other Party: (a) materially breaches this Agreement and fails to cure such breach within [____] days after written notice; (b) becomes insolvent, makes an assignment for the benefit of creditors, or has a bankruptcy petition filed against it that is not dismissed within [____] days; or (c) [assigns this Agreement without consent / challenges the validity of the Licensed IP].

Upon expiration or termination of this Agreement for any reason: (a) all licenses granted hereunder shall immediately terminate; (b) Licensee shall immediately cease all use of the Licensed IP; (c) Licensee shall, within [____] days, destroy or return to Licensor all materials incorporating the Licensed IP in Licensee's possession or control and certify such destruction or return in writing; and (d) all accrued but unpaid royalties and fees shall become immediately due and payable. The following provisions shall survive expiration or termination of this Agreement: Section 2.2 (audit rights, for the retention period stated therein), Section 3.2 (IP Ownership), Article V (Representations, Warranties & Indemnification), to the extent it remains in effect after giving effect to any election made in Section 5.2, Article VI (Confidentiality), Article VII (Limitation of Liability), and Article VIII (Governing Law & Dispute Resolution), together with any accrued payment obligations. Termination of this Agreement shall not limit either Party's right to pursue any remedy available at law or in equity for a breach occurring prior to termination.

Licensor represents and warrants to Licensee that: (a) Licensor has full right, power, and authority to enter into this Agreement and to grant the license granted herein; (b) Licensor is the sole and exclusive owner of, or is otherwise entitled to license, the Licensed IP, free of any lien, encumbrance, or conflicting grant that would prevent Licensee from exercising the license; (c) Licensor has not granted, and during the Term shall not grant, any right to a third party that conflicts with the rights granted to Licensee under Section 1.1; (d) to Licensor's [knowledge / actual knowledge after reasonable inquiry], the Permitted Use of the Licensed IP within the Territory does not infringe, misappropriate, or violate the intellectual property rights of any third party; and (e) as of the Effective Date, there is no pending or, to Licensor's knowledge, threatened claim, action, or proceeding challenging the validity, enforceability, ownership, or use of the Licensed IP. Licensee represents and warrants that it has full right, power, and authority to enter into this Agreement, and that it shall use the Licensed IP in compliance with this Agreement and all applicable laws.

EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 5.1, THE LICENSED IP IS PROVIDED "AS IS," AND LICENSOR DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT, AND ANY WARRANTY THAT THE LICENSED IP WILL BE VALID, ENFORCEABLE, OR COMMERCIALLY SUCCESSFUL. [Full AS IS election: the Licensed IP is licensed strictly AS IS, in which case Sections 5.1(b) through 5.1(e) and Section 5.3 shall not apply, Licensee accepts all risk of third-party infringement, misappropriation, validity, and enforceability claims relating to the Licensed IP, and the survival provision in Section 4.2 and the exclusion in Section 7.2(a) shall be read without reference to Section 5.3. Licensor's representation and warranty of right, power, and authority in Section 5.1(a), and Licensee's representations and warranties in the final sentence of Section 5.1, shall survive this election and remain in full force and effect.]

Licensor shall defend, indemnify, and hold harmless Licensee and its officers, directors, employees, and agents from and against any third-party claim, and all resulting damages, losses, liabilities, settlements, and reasonable attorneys' fees, alleging that Licensee's Permitted Use of the Licensed IP within the Territory in accordance with this Agreement infringes or misappropriates the intellectual property rights of such third party. This indemnity shall not apply to any claim arising from: (a) Licensee's modification of the Licensed IP; (b) Licensee's combination of the Licensed IP with other products, materials, or technology not supplied or approved by Licensor, where the claim would not have arisen but for the combination; (c) use of the Licensed IP outside the Permitted Use or the Territory; or (d) Licensee's continued use after notice from Licensor to cease. Licensor's indemnification obligation under this Section shall be [uncapped / subject to the cap in Section 7.1].

Licensee shall defend, indemnify, and hold harmless Licensor and its officers, directors, employees, and agents from and against any third-party claim, and all resulting damages, losses, liabilities, settlements, and reasonable attorneys' fees, arising from: (a) Licensee's breach of this Agreement; (b) Licensee's products, services, marketing, or business operations, including any product liability claim; (c) Licensee's use of the Licensed IP outside the Permitted Use or the Territory; or (d) Licensee's negligence or willful misconduct.

A Party seeking indemnification shall: (a) give the indemnifying Party prompt written notice of the claim, provided that failure to give prompt notice shall relieve the indemnifying Party of its obligations only to the extent it is materially prejudiced thereby; (b) grant the indemnifying Party sole control of the defense and settlement, except that the indemnifying Party shall not settle any claim in a manner that imposes any non-indemnified liability, admission of fault, or injunctive obligation on the indemnified Party without that Party's prior written consent, not to be unreasonably withheld; and (c) provide reasonable cooperation at the indemnifying Party's expense. The indemnified Party may participate in the defense with counsel of its own choosing at its own expense.

Licensor shall have the first right, but not the obligation, to institute, prosecute, and control any action or proceeding to enforce the Licensed IP against a third-party infringer, at Licensor's expense and for Licensor's benefit. If the license granted under Section 1.1 is exclusive within the Territory and Licensor fails to abate an infringement that materially affects Licensee's exercise of the license, or to institute an enforcement action, within [sixty (60)] days after written notice from Licensee, then Licensee shall have the right, at its expense, to institute and control such action in its own name and, to the extent permitted by applicable law, to join Licensor as a necessary party, and Licensor shall reasonably cooperate at Licensee's expense. Any recovery obtained in an action shall first reimburse the controlling Party's costs and expenses, then the other Party's costs and expenses, and the remainder shall be [retained by the controlling Party / allocated ____% to Licensor and ____% to Licensee]. Neither Party shall settle any enforcement action in a manner that admits the invalidity or unenforceability of the Licensed IP, or that materially impairs the other Party's rights, without that Party's prior written consent.

"Confidential Information" means non-public information disclosed by one Party to the other in connection with this Agreement that is designated as confidential or that a reasonable person would understand to be confidential given its nature and the circumstances of disclosure, including the Licensed IP, unpublished applications and know-how, royalty reports, and the terms of this Agreement. Confidential Information does not include information that: (a) is or becomes public through no fault of the receiving Party; (b) was rightfully known to the receiving Party without restriction before disclosure; (c) is rightfully received from a third party without restriction; or (d) is independently developed without use of or reference to the disclosing Party's Confidential Information. Each Party shall protect the other's Confidential Information with at least reasonable care, shall use it solely to perform this Agreement, and shall disclose it only to those of its personnel and professional advisors who have a need to know and who are bound by confidentiality obligations no less protective than these. A Party compelled by law or valid legal process to disclose Confidential Information may do so after giving the disclosing Party prompt notice, to the extent legally permitted, and reasonable cooperation in seeking protective treatment. These obligations continue for [five (5)] years after expiration or termination, and with respect to trade secrets, for so long as the information remains a trade secret under applicable law.

EXCEPT AS PROVIDED IN SECTION 7.2, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES, OR FOR LOST PROFITS, LOST REVENUE, OR LOSS OF GOODWILL, ARISING OUT OF OR RELATING TO THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT AS PROVIDED IN SECTION 7.2, EACH PARTY'S AGGREGATE LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL NOT EXCEED THE GREATER OF [$__________] OR THE TOTAL ROYALTIES AND FEES PAID OR PAYABLE BY LICENSEE UNDER THIS AGREEMENT IN THE [TWELVE (12)] MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

The limitations and exclusions in Section 7.1 shall not apply to: (a) Licensee's indemnification obligation under Section 5.4, and Licensor's indemnification obligation under Section 5.3 where that Section applies and the Parties have elected there that the obligation is uncapped; (b) Licensee's obligation to pay royalties and fees accrued under Article II (Royalties & Payment); (c) a Party's breach of Article VI (Confidentiality); (d) Licensee's use of the Licensed IP outside the scope of the license granted in Section 1.1, or infringement or misappropriation of the Licensed IP; or (e) a Party's fraud, gross negligence, or willful misconduct. Nothing in this Agreement excludes or limits any liability that cannot be excluded or limited under applicable law.

This Agreement shall be governed by and construed in accordance with the laws of the State of [____________], without regard to its conflict of laws principles, except that the validity, scope, and enforceability of any patent, trademark, or copyright comprising the Licensed IP shall be governed by the law of the jurisdiction that granted or protects that right. The United Nations Convention on Contracts for the International Sale of Goods shall not apply.

Any dispute arising out of or relating to this Agreement shall be resolved by [binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, before [one (1) / three (3)] arbitrator(s), seated in [____________], with judgment on the award entered in any court of competent jurisdiction / litigation in the state or federal courts located in [____________] County, State of [____________], to whose exclusive jurisdiction and venue each Party irrevocably consents]. Notwithstanding the foregoing, either Party may seek temporary or preliminary injunctive relief in any court of competent jurisdiction to protect the Licensed IP or its Confidential Information. The prevailing Party in any proceeding shall be entitled to recover its reasonable attorneys' fees and costs.

This Agreement, together with its Exhibits, constitutes the entire agreement of the Parties with respect to its subject matter and supersedes all prior agreements and understandings. This Agreement may be amended or waived only by a writing signed by both Parties, and no waiver of any breach shall be a waiver of any other or subsequent breach. Licensee shall not assign this Agreement, by operation of law or otherwise, without Licensor's prior written consent, and any purported assignment in violation of this Section is void. Notices shall be in writing and delivered to the addresses set forth beneath the Parties' signatures, by personal delivery, nationally recognized overnight courier, or certified mail, return receipt requested. If any provision of this Agreement is held invalid or unenforceable, that provision shall be enforced to the maximum extent permitted by law and the remaining provisions shall remain in full force and effect. This Agreement may be executed in counterparts, and signatures delivered by electronic transmission shall be deemed originals. The Parties are independent contractors, and nothing in this Agreement creates a partnership, joint venture, agency, or employment relationship.