Licensing Agreements

The legal framework

A licence lets someone use intellectual property without becoming its owner. Done well, it turns an asset into recurring revenue while the owner keeps control. Done badly, it gives away more than intended or becomes impossible to enforce. The licence is a contract, governed by Book 5 of the Civil Code and the freedom of the parties, but each type of right adds its own rules.

Trademarks. Under Article 25 of the EU Trade Mark Regulation (EU) 2017/1001, an EU trade mark can be licensed for some or all of the goods and services, and for the whole or part of the Union, on an exclusive or non-exclusive basis. A licensee may bring infringement proceedings only with the proprietor's consent, unless it holds an exclusive licence and the proprietor, after formal notice, does not itself sue within an appropriate period. The licence can be recorded in the register. Quality control is a legal necessity: a proprietor who allows a licensee to use the mark in a way that misleads the public risks revocation.

Patents. Patents can be licensed under the European Patent Convention and national law. Under Article 47 of the Agreement on a Unified Patent Court, an exclusive licensee may act against infringers, unless the licence provides otherwise, if the patentee is given prior notice.

Copyright and software. Under the copyright law of many member states, a licence or transfer of rights must be in writing and is interpreted in favour of the author. The mode of exploitation, scope, duration and territory should be stated expressly.

Competition law. Licences of technology fall under the Technology Transfer Block Exemption Regulation (TTBER). The Commission adopted a revised TTBER in April 2026 that applies from 1 May 2026, replacing the 2014 regulation. Licences between competitors and non-competitors are treated differently, with market-share thresholds, a list of hardcore restrictions (such as price fixing between competitors) and excluded restrictions (such as an exclusive grant-back of improvements). Trademark and copyright licences that are part of distribution or franchising are assessed under the Vertical Block Exemption Regulation (EU) 2022/720.

Insolvency. What happens to the licence if either party becomes insolvent is worth stating in the contract, as national insolvency rules can limit the effect of termination clauses.

In practice

Scope: the heart of the licence

Scope defines what the licensee may do. The key dimensions are field of use, territory, exclusivity (exclusive, sole or non-exclusive) and whether sublicensing is allowed. An exclusive licence excludes everyone else, including the licensor. A sole licence lets the licensor keep using the right but excludes other licensees. A non-exclusive licence allows several licensees in parallel. A narrow scope lets you license the same right to different partners in different fields. A vague scope is the most common source of disputes.

Royalties, minimums and audit

Common models are a percentage of net sales, a fixed fee per unit or a flat periodic fee. Minimum royalties protect the licensor if an exclusive licensee underperforms. Audit rights let the licensor verify the figures. Defining the royalty base, especially what counts as net sales, matters as much as the rate.

Improvements and grant-backs

If the licensee improves the technology, who owns the improvement? A non-exclusive grant-back is usually acceptable. Exclusive grant-backs are restricted under the TTBER. Ownership of derivatives should be settled at the start.

Quality control, term and exit

For trademarks, the licence must set quality standards and give the owner the right to inspect and enforce them. Every licence needs a term, grounds for termination and a list of what survives, such as confidentiality and the obligation to stop using the right. Sell-off periods for stock should be addressed.

An example

A Ghent fashion brand licenses its mark to a Spanish manufacturer for a line of bags in Spain and Portugal, exclusive for those countries. The contract sets a royalty of a percentage of net sales with a minimum, quality approval of samples, and recording of the licence. After one year, sales are below expectations. Because the minimum royalty applies, the brand is paid regardless, and because the licence set quality approvals, it can reject a sub-standard batch without risking its mark. Had the contract been silent on both, it would have had neither tool.

Frequently asked questions

What is the difference between an exclusive and a sole licence?

An exclusive licence excludes everyone, including the licensor, in the defined scope. A sole licence lets the licensor continue to use the right but excludes other licensees.

Should we use a licence or an assignment?

A licence keeps ownership and grants use. An assignment transfers ownership. If you want to keep the asset and earn from it, license. If you are selling it, assign.

Does a licence have to be recorded?

Not to be valid between the parties. Recording at the relevant IP office gives public notice, and may be needed to rely on the licence against third parties. See transferring and licensing a trademark.

Can we stop the licensee from challenging our IP?

No-challenge clauses are treated with caution under EU competition law. Terminating an exclusive licence if the licensee challenges the right is generally acceptable, but the position is more nuanced for non-exclusive licences, so take advice.

How this connects

Licensing is the common ground of trademark licensing and patent and technology licensing. We draft licences with our Document Studio, review a counterparty's draft with our contract review, and track royalty reports, audit rights and notice periods through the rights and obligations register. For transfers of know-how, see technology transfer agreements.