How to Draft a Sublicense Agreement
- 1). Date and title the contract as a Sublicense Agreement. Add the name of the company to the title. Establish the parties to the contract by including the name and address of each party. Use the terms "licensor," "sublicensee," and "agreement" within the body of the contract.
- 2). Define the rights of the owner of the intellectual property. Use wording such as "all rights," "title to" and "interest in" to refer to absolute ownership of the property. Use additional terms that reflect the licensor's right to authorize the manufacturing, granting, distributing, and selling of intellectual property.
- 3). Establish the grant of license to the sublicensee. Classfy the terms of the grant. Include language such as "exclusive," "non-transferable," "non-assignable," and "revocable" to refer to the authorization and use of trademarked and copyrighted materials.
- 4). Add a termination clause for breach of contract. Establish a period for which the licensor will terminate the sublicense based on a set of conditions. Provide a clause for prosecution of trademark infringement.
- 5). Establish a warranties clause in which the sublicensee guarantees that it has the authority to enter into the agreement, perform duties outlined in the contract, and consummate all business transactions as prescribed by the granting of rights. Include also a liability clause that defines protections for both parties.
- 6). Create a marketing and advertising clause. Establish boundaries for how the sublicensee will use and commercially exploit the grantor's products, services, and trademarked materials. Set a time limit for how long the sublicensee can use the company logo, signage, and other copyrighted materials.
- 7). Include a royalties clause in which the sublicensee agrees to pay the licensor a set fee or percentage amount based upon revenue generated from the sale of the licensor's products and services. Define how much the sublicensee will receive from the sales by developing a formula for calculating the net sales price.