How to Create a License Agreement that Protects You Too

license agreement

A licensing agreement is an official document between two parties for the use of trademarked or patented items. It is a legal and enforceable contract provided by the property owner for the use of his product or service. 

As a property owner, do you know how to create a license agreement? In this article, we’ll guide you through the different types of agreements and how to write one. 

license agreement

How Can a License Agreement Help You?

A licensing agreement allows you to give legal permission to another person to use your property. For example, you can use this document to give permission to use your song in a commercial. With the document in place, the other party won’t face a fine for illegally using your property.

This type of agreement is usually used on intellectual property. This includes patents, copyrighted materials, and trademarks. It can also be used on materials like film, artwork, music, and video. 

Even though the agreement is in place, it doesn’t give the other person ownership over your work. As the owner, you can give permission through these three types of licensing agreements:

  • Exclusive license – If you provide an exclusive license, the licensee has full rights to use the property throughout the contract’s duration.
  • Non-exclusive license – This allows you to sell the property to others even if a licensee has an agreement in place.
  • Sole license – Unlike an exclusive license, you continue to have the right to use your property. 

Free License Agreement Template

If you’re ready to get started in drafting a license agreement, you can use a customizable template. You can start creating your agreement right away using this tool.

License Agreement

How to Write License Agreement: Adding the Important Parts

Most of the time, these documents contain standard clauses that cover common issues that take place during a negotiation. But the most important parts of the agreement include the following:


Let’s face it; you’re here to make money out of your property. There is no denying this fact. With that out of the way, you have to make sure that the agreement will work out in your favor financially. 


Another thing you have to pay attention to is the exclusivity of the property you are offering. Will you benefit from an exclusive agreement? Or will you earn more from a sole license? Pay attention to the fine print so you can find a Win-Win situation. 


Most of the time, licensees ask for full rights to a property, which requires an exclusive agreement. As the licensor, you have the authority to approve this request or not. Try to find an option that will be beneficial to you too.

As the licensor, you have to focus on these things so you can make a wise decision about your property. The other things you need to include when writing a license agreement are:

  • Contract length – Include a start and end date for the agreement.
  • Dispute resolution – Have a standard clause discussing terms when a disagreement occurs.
  • Payment schedule – Outline the chosen payment schedule and method. Be clear about this.
  • Sub-licensing – Make sure that your agreement includes information on sub-licensing the property to a third party.

How Fill Can Help Prepare the Document 

When you’re ready to start learning how to write a license agreement, you can save time and energy by using a template. With Fill, you don’t only have a template to customize with your information, but the service also provides remote collaboration so you can have your document signed right away.

Andria Pacina

Andria is a seasoned content writer, specializing in document management solutions and HIPAA compliance, providing valuable insights for businesses and professionals alike.

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