Licensing Agreement Architect
PRODraft comprehensive licensing agreements for patents, software, trademarks, copyrights, and trade secrets. Generate grant of license clauses, royalty structures, exclusivity terms, quality control provisions, and termination mechanics with industry-standard language.
Example Usage
User: “I’m a SaaS company licensing our API platform to an enterprise customer. We want a 3-year subscription license with non-exclusive rights in their industry, $100K annual minimum guarantee plus 5% revenue share on platform fees. We need to protect our IP, limit sublicensing, include SLA uptime guarantees (99.9%), and reserve the right to audit usage quarterly. Can you help me draft the key sections: Grant of License, Restrictions, Payment Terms, Support SLA, Audit Rights, and Termination?”
AI Response: “I’ll draft a comprehensive SaaS licensing agreement with the parameters you’ve specified. Let me structure this with enterprise-standard provisions:
1. GRANT OF LICENSE Subject to the terms of this Agreement, Licensor grants to Licensee a non-exclusive, non-transferable license to: (a) Access and use the API Platform solely for Licensee’s internal business operations within the [Industry] sector; (b) Integrate the API Platform with Licensee’s approved systems; (c) Permit up to [X] authorized users to access the Platform.
This license expressly excludes: (i) sublicensing rights except with prior written consent; (ii) rights to decompile, reverse engineer, or create derivative works; (iii) use for competing product development.
2. RESTRICTIONS Licensee shall NOT:
- Sublicense, resell, or redistribute the API Platform without express written consent
- Benchmark or publish performance comparisons without prior approval
- Attempt to circumvent usage metering or access controls
- Use Platform data to train competing AI or machine learning models
3. PAYMENT TERMS
- Annual License Fee: $100,000 (Minimum Annual Guarantee)
- Revenue Share: 5% of Gross Platform Fees generated through API integrations
- Payment Schedule: Quarterly, within 30 days of quarter end
- Revenue Reporting: Licensee shall provide certified revenue reports within 15 days of quarter end
- Escalation: License fee increases 3% annually
4. SUPPORT & SLA
- Uptime Guarantee: 99.9% availability, measured monthly
- Service Credits: 10% credit for 99.0-99.9%; 25% for below 99.0%
- Response Times: Critical issues within 1 hour; High within 4 hours; Medium within 24 hours
- Maintenance Windows: Scheduled maintenance (48-hour notice) excluded from uptime calculation
5. AUDIT RIGHTS Licensor reserves the right to:
- Conduct quarterly usage audits with 10 business days’ notice
- Access anonymized API call logs and integration metrics
- Engage independent auditors for revenue verification
- Remedy: Underpayment >5% results in payment plus audit costs
6. TERMINATION This Agreement terminates upon:
- Material breach uncured after 30 days’ written notice
- Licensee bankruptcy or insolvency
- Failure to meet Minimum Annual Guarantee for two consecutive quarters
- Post-termination: Licensee must cease all API access within 30 days, delete cached data
Shall I expand any section or add data security/GDPR provisions?”
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Suggested Customization
| Description | Default | Your Value |
|---|---|---|
| Type of IP being licensed (patent, software, trademark, copyright, trade_secret, franchise) | software | |
| License exclusivity model (exclusive, non_exclusive, sole) | non_exclusive | |
| Percentage of net sales paid as royalty (typical range 2-7%) | 5.0 | |
| Minimum annual payment licensee must make regardless of sales | 50000 | |
| Duration of license in years (or perpetual) | 3 | |
| Geographic scope (worldwide, region-specific, country-specific) | worldwide | |
| Whether licensor must provide training or technical support | false | |
| Who owns improvements/derivatives (licensor_only, licensee_only, shared_with_grantback) | shared |
Research Sources
This skill was built using research from these authoritative sources:
- Software License Agreements: Types, Clauses, Best Practices Enterprise guide covering SLA structure, essential clauses, SaaS differences, and implementation considerations
- Licensing and Selling IP in the EU Official EU guidance on licensing requirements, exclusivity, territorial scope, and termination
- Types of Licensing Agreements Comprehensive breakdown of patent, trademark, copyright, trade secret licensing categories
- GitHub: Licensing a Repository Authoritative guide to selecting and implementing open-source licenses
- Key Issues in Software License Drafting Thomson Reuters guidance on license scope, delivery terms, and proprietary rights
- IP Licensing Pitfalls Expert analysis of common mistakes including vague language and payment term issues
- Open Source License Comparison: MIT vs Apache vs GPL Comparison of permissive vs copyleft approaches, patent protections, commercial implications
- Negotiating Licensing Agreements (Reddit) Real-world discussion on royalty rates (2-7%), upfront fees, and practical negotiation strategies
- Product Licensing Mistakes to Avoid Critical mistakes: missing performance clauses and overly restrictive grant provisions
- Icertis: Licensing Agreement Essentials Professional guide to common terms, IP types, and essential agreement elements