Grant of license: Overview, definition, and example
What is a grant of license?
A grant of license refers to the legal permission or authority granted by a licensor (the owner) to a licensee (the recipient) to use specific intellectual property or assets, such as patents, trademarks, copyrights, or software, under agreed-upon terms and conditions. This license allows the licensee to use the intellectual property or assets in a specified way and for a defined period, without transferring ownership of the underlying property.
For example, a software company might grant a user a license to use its software for a year, allowing the user to access and use the program but not to sell or distribute it.
Why is a grant of license important?
The grant of license is important because it allows businesses or individuals to retain ownership of valuable intellectual property while enabling others to use it under specific conditions. It creates a mutually beneficial arrangement, allowing the licensee to access valuable resources or technology while ensuring that the licensor retains control over how the intellectual property is used.
For businesses, granting a license can generate revenue through licensing fees, royalties, or other payments, while also protecting their intellectual property and preventing unauthorized use.
Understanding grant of license through an example
Imagine a company that owns the rights to a popular mobile app. The company decides to grant a license to a third-party developer to incorporate certain features of the app into their own product. The license agreement specifies how the third-party developer can use the app’s features, for how long, and under what conditions. This allows the developer to use the intellectual property without acquiring full ownership.
In another example, a music producer grants a license to a filmmaker to use one of their songs in the soundtrack of a movie. The agreement outlines the scope of the usage, such as the duration of the song’s inclusion in the movie and any territorial restrictions on its use.
An example of a grant of license clause
Here’s how a grant of license clause might look in a contract:
“The Licensor hereby grants the Licensee a non-exclusive, non-transferable license to use the Software for a period of one year from the Effective Date, subject to the terms and conditions set forth in this Agreement. The Licensee may not distribute, sublicense, or modify the Software without prior written consent from the Licensor.”
Conclusion
A grant of license is a powerful tool for businesses to allow the use of their intellectual property while retaining control and ownership. It enables companies to monetize their assets, extend their reach, and form strategic partnerships, while safeguarding against unauthorized use or distribution.
By clearly defining the terms of a license in an agreement, businesses can ensure that both parties understand the scope, limitations, and duration of the license, protecting their rights and ensuring proper usage.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.