--- title: "Licensing Agreements | Pitch" description: "How to structure an IP licence: scope, royalties, improvements, quality control, termination, and the EU rules that frame it." url: https://www.pitch.law/academy/licensing-agreements --- [pitch](https://www.pitch.law/) [Academy](https://www.pitch.law/academy) [Commercial](https://www.pitch.law/academy/topics/commercial) # Licensing Agreements How to structure an IP licence: scope, royalties, improvements, quality control, termination, and the EU rules that frame it. - By By Bart Lieben, Attorney-at-Law - Published 26 October 2026 ## 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](https://www.pitch.law/academy/trademark-transfer-licensing-recordals). ### 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](https://www.pitch.law/solutions/trademark-licensing) and [patent and technology licensing](https://www.pitch.law/solutions/patent-technology-licensing). We draft licences with [our Document Studio](https://www.pitch.law/technologies/contract-studio), review a counterparty's draft with [our contract review](https://www.pitch.law/technologies/clause-library-risk-review), and track royalty reports, audit rights and notice periods through [the rights and obligations register](https://www.pitch.law/technologies/contract-obligations). For transfers of know-how, see [technology transfer agreements](https://www.pitch.law/academy/technology-transfer-agreements). ## In short - Scope: field, territory, exclusivity, sublicensing - Royalties, minimums and audit rights - Improvements, grant-backs and quality control - Competition law limits on licence terms ## Related solutions - [Solutions](https://www.pitch.law/solutions/trademark-licensing) ### [Trademark Licensing](https://www.pitch.law/solutions/trademark-licensing) [Licence your brand to a partner, franchisee or distributor and keep control of quality, territory and the mark itself.](https://www.pitch.law/solutions/trademark-licensing) - [Solutions](https://www.pitch.law/solutions/patent-technology-licensing) ### [Patent and Technology Licensing](https://www.pitch.law/solutions/patent-technology-licensing) [Licence or acquire patents, know-how and software on terms that protect your edge, your income and your competition-law position.](https://www.pitch.law/solutions/patent-technology-licensing) - [Solutions](https://www.pitch.law/solutions/valuation) ### [Valuation](https://www.pitch.law/solutions/valuation) [A price for a company or its IP is only as good as the rights behind it. We supply the legal, IP and tax input that makes a valuation stand, whether it serves a funding round, a contribution in kind, a transfer or an exit.](https://www.pitch.law/solutions/valuation) ## Technology we use - [Technology](https://www.pitch.law/technologies/contract-studio) ### [Document Studio](https://www.pitch.law/technologies/contract-studio) [Our Document Studio drafts and analyses legal documents in a secure, on-premise environment, and keeps the documents behind your matters up to date as new data comes in and procedural steps fall due.](https://www.pitch.law/technologies/contract-studio) - [Technology](https://www.pitch.law/technologies/contract-obligations) ### [Contract Management: Rights and Obligations](https://www.pitch.law/technologies/contract-obligations) [Once a contract is final, we pull out each party's duties and rights with the clause they come from, have a person confirm them, and follow them with reminders.](https://www.pitch.law/technologies/contract-obligations) - [Technology](https://www.pitch.law/technologies/clause-library-risk-review) ### [Contract Review](https://www.pitch.law/technologies/clause-library-risk-review) [Send us the contract the other side drafted and we check it clause by clause against our playbook, with a risk ranking an attorney has verified.](https://www.pitch.law/technologies/clause-library-risk-review) ## More in Commercial - ### [Commercial Contracts: a Map](https://www.pitch.law/academy/commercial-contracts-overview) [The main families of commercial contract, the EU and national rules that frame them, and where risk and value tend to sit.](https://www.pitch.law/academy/commercial-contracts-overview) - ### [Distribution and Reseller Agreements](https://www.pitch.law/academy/distribution-reseller-agreements) [How to structure distribution and reseller agreements in the EU: exclusivity, termination protection, online sales, and the brand provisions that keep control.](https://www.pitch.law/academy/distribution-reseller-agreements) - ### [Manufacturing and Supply Agreements](https://www.pitch.law/academy/manufacturing-supply-agreements) [What a manufacturing or supply agreement must settle: specifications, quality, liability, exclusivity and, above all, who owns the tooling, know-how and improvements.](https://www.pitch.law/academy/manufacturing-supply-agreements) - ### [Master Services Agreements and SOWs](https://www.pitch.law/academy/master-services-agreements-sow) [How a master services agreement and statements of work split the legal terms from the project detail, and how EU and national rules shape the key clauses.](https://www.pitch.law/academy/master-services-agreements-sow) - ### [Running an RFI or RFP](https://www.pitch.law/academy/rfi-rfp-procurement) [How to run a request for information or proposal so that confidentiality, IP and your contract terms are protected before you choose a vendor.](https://www.pitch.law/academy/rfi-rfp-procurement) - ### [SaaS Agreements](https://www.pitch.law/academy/saas-agreements) [Subscriptions, service levels, data ownership, liability and exit in SaaS contracts, with the GDPR, the Data Act and national contract rules.](https://www.pitch.law/academy/saas-agreements) ## Let’s talk Tell us what you’re working on. We’ll get the right person on it and reply within one business day. The first chat is free. [Schedule a meeting](https://www.pitch.law/schedule)