A licence is permission to use an intellectual property right belonging to someone else. The licensor remains the owner; the licensee obtains a right of use within the limits the agreement sets. That distinction from an assignment is fundamental and is regularly blurred in practice.
Legal basis
The licence agreement is not regulated as a separate contract in the Dutch Civil Code; the general law of obligations in Book 6 applies. The intellectual property statutes govern the edges. Article 2 of the Copyright Act requires a deed for an assignment, whereas a licence can be granted without any particular form; recording it in writing remains advisable, certainly where exclusivity is agreed. For trade marks, Article 2.33 of the Benelux Convention allows the licence to be entered in the register, which matters for its effect against third parties. Licences between undertakings also engage competition law, with the technology transfer block exemption as the framework.
How it works in practice
The heart of the agreement lies in four choices: territory, duration, the permitted acts, and the degree of exclusivity. An exclusive licence excludes the licensor as well; a sole licence does not. Beyond that come the fee, whether sublicensing is allowed, who acts against infringement by third parties, and what happens on insolvency or a change of control on either side.
Where it goes wrong
Three points recur. First, the scope of the right of use, described too broadly or too vaguely, leaving room for argument later. Second, the absence of any termination provision, which can leave the licensee suddenly without a right. Third, the assumption that a licence transfers automatically on a share deal.
Related terms
The licence agreement connects to trade mark law, to copyright in software and to the SaaS agreement.
Granting or taking a licence? Our IT lawyers draft the agreement and weigh the risks.
