Protection & Confidentiality
IP Licence Agreement — Common Law Jurisdictions
An IP licence agreement allows the owner of intellectual property — copyright, a trade mark, a patent, or other IP — to permit another party to use that IP without transferring ownership. Unlike an IP assignment, which permanently transfers the rights, a licence is a permission that can be limited in scope, territory, duration, and exclusivity. The LegalEase IP licence agreement is drafted to common law principles and is suitable for use across Kenya, the United Kingdom, Nigeria, Ghana, Australia, the UAE, and all other common law jurisdictions. For Kenyan IP, the agreement references the Copyright Act (Cap. 130), the Trade Marks Act (Cap. 506), and the Industrial Property Act, 2001. For UK IP, it references the Copyright, Designs and Patents Act 1988 (CDPA), the Trade Marks Act 1994, and the Patents Act 1977.
This template is a professionally drafted legal document. It does not constitute legal advice. LegalEase accepts no liability beyond the cost of the document purchased. For complex transactions, we recommend review by a qualified legal practitioner.
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Who needs this document
You need an IP licence agreement if you own intellectual property — copyright, a trade mark, a patent, or other IP — and want to permit another party to use it without giving up ownership permanently. A licence is appropriate when you want to generate revenue from your IP, grant a partner or distributor usage rights, or allow a client to use work you have created without assigning the underlying rights. The LegalEase IP licence agreement is suitable for creators, software developers, businesses, and legal practitioners across Kenya, the UK, Nigeria, Ghana, Australia, the UAE, and all common law jurisdictions.
Assignment vs licence — which do you need?
This is the most important question before choosing between an IP assignment and an IP licence.
An IP assignment permanently transfers ownership. Once assigned, the original owner no longer holds the intellectual property rights — they belong entirely to the assignee. An assignment is appropriate when you are selling your IP outright, when you are transferring work created under a freelance or employment contract to a client, or when IP is being contributed as part of a business deal or co-founder arrangement.
An IP licence grants permission to use the IP while the owner retains ownership. The licence can be limited in multiple ways: by territory (Kenya only, East Africa, worldwide), by permitted use (reproduction only, distribution only, sub-licensing permitted or not), by duration (one year, five years, in perpetuity), and by exclusivity. The owner continues to own the IP and can enforce it against third parties, grant further licences to other parties (if the licence is non-exclusive), and recover the rights when the licence expires or is terminated.
Use a licence when you want to generate revenue from your IP without giving it away permanently. Use an assignment when the transaction involves a final transfer of ownership.
Exclusive, non-exclusive, and sole licences — the differences
Non-exclusive licence: The licensor can grant the same licence to multiple licensees simultaneously. The licensee gets the right to use the IP but has no exclusivity. This is the most common structure for software licences, content licences, and general commercial IP use.
Exclusive licence: Only the named licensee can use the IP in the defined territory and scope — the licensor cannot grant the same rights to anyone else, and in most common law jurisdictions (including under the CDPA 1988 in the UK and Cap. 130 in Kenya) an exclusive licensee has standing to sue infringers in their own name. This is the strongest commercial licence structure and commands a higher royalty or fee.
Sole licence: The licensor grants rights to one licensee but retains the right to continue using the IP themselves. The licensor cannot grant the same rights to others, but they are not excluded from the IP. This sits between exclusive and non-exclusive.
The LegalEase IP licence agreement lets you select the licence type. The document generated reflects the correct exclusivity structure, sub-licensing permissions, and enforcement rights for the type chosen.
Frequently Asked Questions
What is the difference between an IP assignment and an IP licence?
An assignment permanently transfers ownership of the IP to the licensee — like selling property. A licence grants permission to use the IP under specified conditions while the owner retains ownership — like renting property. Licences can be exclusive (only the licensee can use it) or non-exclusive (the owner can licence to others too).
Is an IP licence agreement enforceable in Kenya?
Yes. IP licences are enforceable under the Law of Contract Act (Cap. 23) and the relevant IP legislation (Copyright Act Cap. 130, Industrial Property Act 2001). Registered rights (patents, trademarks) benefit from additional protection if the licence is recorded with KEIPO (Kenya Industrial Property Institute).
Can an IP licence be terminated early?
Yes, if the agreement includes termination clauses. Common grounds include breach of the licence terms, non-payment of royalties, or insolvency of the licensee. Without a termination clause, courts will imply a reasonable notice period.
Does an IP licence need to be in writing in Kenya?
For copyright licences, an exclusive licence must be in writing and signed by or on behalf of the copyright owner to be legally effective under the Copyright Act (Cap. 130). Non-exclusive licences can be oral but are extremely difficult to enforce without a written record. For trade mark licences, the Trade Marks Act (Cap. 506) permits written recorded licences and requires registration of a registered user for certain formal arrangements. A written IP licence agreement is always the correct approach regardless of whether it is technically required.
Does an IP licence need to be registered in Kenya or the UK?
In Kenya, voluntary recordal of licences with the Kenya Copyright Board (KECOBO) or the Kenya Industrial Property Institute (KIPI) is possible but not mandatory for the licence to be enforceable between the parties. In the UK, exclusive patent licences can be recorded at the UKIPO under the Patents Act 1977 — recordal gives the licensee additional procedural rights. Trade mark licences can also be recorded at the UKIPO. The LegalEase IP licence agreement includes a note on recordal obligations for the jurisdiction selected.
What happens to an IP licence if the licensor sells the underlying IP?
Under common law principles, an IP licence granted before an assignment of the IP generally binds the assignee — the buyer takes the IP subject to the existing licence. This is why IP assignments should always include a warranties clause disclosing all existing licences. The LegalEase IP assignment agreement includes a disclosure schedule for this purpose. If you are buying IP, always require the seller to disclose all existing licences before completion.