Manufacturing License Agreement Examples

Explore practical examples of manufacturing license agreements for clear understanding.
By Jamie

Understanding Manufacturing License Agreements

Manufacturing License Agreements are essential legal documents used when one party (the licensor) grants permission to another party (the licensee) to manufacture and sell a product. These agreements protect intellectual property rights and outline the terms of production, quality control, and distribution. Below are three diverse examples of Manufacturing License Agreements that illustrate how such agreements can be structured and employed.

Example 1: Electronics Manufacturing License Agreement

Context

This agreement is used when a technology company wants to allow a manufacturer to produce its electronic devices.

The electronics company, Tech Innovations, Inc., holds a patent for a new smartphone technology. They wish to license this technology to a manufacturing firm, Global Tech Manufacturing, to produce and distribute the devices under their brand.


**Manufacturing License Agreement**

**Parties:**  
This Agreement is made between Tech Innovations, Inc. (Licensor) and Global Tech Manufacturing (Licensee).  

**License Grant:**  
Licensor grants Licensee the right to manufacture and sell smartphones utilizing the patented technology described in U.S. Patent No. 1234567.  

**Term:**  
The term of this Agreement shall be five (5) years from the effective date.

**Royalty Payments:**  
Licensee agrees to pay Licensor a royalty of 5% of the gross sales of the smartphones. Payments shall be made quarterly.  

**Quality Control:**  
Licensee agrees to maintain quality standards as outlined in Exhibit A and submit products for Licensor's approval prior to market release.  

**Termination:**  
Either party may terminate this Agreement with 30 days written notice if the other party breaches any material term.  

**Governing Law:**  
This Agreement shall be governed by the laws of the State of California.

**Signatures:**  
_________________________  
Tech Innovations, Inc.  
_________________________  
Global Tech Manufacturing

Notes

  • The royalty percentage can vary based on industry standards.
  • Quality control measures should be clearly defined in an exhibit to ensure compliance.

Example 2: Food Product Manufacturing License Agreement

Context

This agreement is appropriate for a food company licensing a recipe to a manufacturer.

Natural Foods Co. has developed a unique organic granola recipe and wants to license it to Green Valley Snacks, a local snack manufacturer, to produce and distribute the product under the Natural Foods brand.


**Manufacturing License Agreement**

**Parties:**  
This Agreement is made between Natural Foods Co. (Licensor) and Green Valley Snacks (Licensee).  

**License Grant:**  
Licensor grants Licensee the exclusive right to manufacture and sell the granola product using the recipe detailed in Exhibit B.  

**Term:**  
This Agreement shall commence on January 1, 2024, for a period of three (3) years.  

**Royalty Payments:**  
Licensee shall pay Licensor a royalty of 7% of net sales, payable monthly.  

**Packaging and Labeling:**  
Licensee agrees to follow Licensor’s specifications for packaging and labeling as detailed in Exhibit C.  

**Termination:**  
Licensor may terminate this Agreement if Licensee fails to meet sales targets specified in Exhibit D.  

**Governing Law:**  
This Agreement shall be governed by the laws of the State of New York.

**Signatures:**  
_________________________  
Natural Foods Co.  
_________________________  
Green Valley Snacks

Notes

  • Exclusivity can be a significant factor in negotiations and should be explicitly mentioned.
  • Including sales targets can help ensure the licensee is motivated to perform.

Example 3: Pharmaceutical Manufacturing License Agreement

Context

This agreement is tailored for a pharmaceutical company licensing a drug formulation to a manufacturer.

Pharma Solutions, LLC has developed a new medication for hypertension and seeks to license the formulation to MedTech Corp for mass production and distribution.


**Manufacturing License Agreement**

**Parties:**  
This Agreement is made between Pharma Solutions, LLC (Licensor) and MedTech Corp (Licensee).  

**License Grant:**  
Licensor grants Licensee the non-exclusive right to manufacture, market, and distribute the medication as per the formulation detailed in Patent No. 9876543.  

**Term:**  
The term of this Agreement will be for ten (10) years, renewable upon mutual agreement.  

**Royalty Payments:**  
Licensee shall pay Licensor a royalty of 10% of the net sales, with payments due quarterly.  

**Compliance:**  
Licensee agrees to comply with all applicable FDA regulations and shall provide Licensor with copies of all compliance reports.  

**Termination:**  
Either party may terminate this Agreement for cause if the other party fails to comply with regulatory requirements.  

**Governing Law:**  
This Agreement shall be governed by the laws of the State of New Jersey.

**Signatures:**  
_________________________  
Pharma Solutions, LLC  
_________________________  
MedTech Corp

Notes

  • Compliance with regulatory bodies is critical in pharmaceutical agreements.
  • Consider including a clause for audits to ensure compliance with quality and safety standards.