Introduction to Sub-License Agreements

A Sub-License Agreement is a legal document that allows a licensee to grant some or all of the rights they receive under a primary license to a third party, known as the sub-licensee. This type of agreement is commonly used in various industries, including technology, entertainment, and manufacturing. Below, we provide three diverse examples of Sub-License Agreements, each illustrating a unique context and use case.

Example 1: Software Sub-License Agreement

Context: A software development company (Licensee) has acquired the rights to a proprietary software application and wants to allow a third-party developer (Sub-Licensee) to modify and market it in a specific region.

The Licensee, ABC Software Inc., has entered into a licensing agreement with the original developer to use their software. ABC Software Inc. decides to enter into a Sub-License Agreement with XYZ Devs to enhance the software for a regional market.

In this agreement, ABC Software Inc. permits XYZ Devs to:

• Modify the software’s user interface and features.
• Market the software exclusively in South America.
• Charge users for access to the application.
• Share 20% of the revenue generated from sales with ABC Software Inc.

Notes: Ensure that the Sub-License Agreement outlines the duration, territory, and specific rights being sub-licensed to avoid misunderstandings. Consider including clauses about intellectual property rights and liability as well.

Example 2: Product Distribution Sub-License Agreement

Context: A beverage company (Licensee) has the rights to produce a new energy drink and wishes to allow a regional distributor (Sub-Licensee) to sell the product within their territory.

Fresh Beverages LLC has secured a license to manufacture and distribute a popular energy drink developed by Energy Corp. They now want to grant a Sub-License Agreement to Power Distributors to sell the product in the Midwest region.

Under this Sub-License Agreement, Power Distributors is allowed to:

• Distribute the energy drink in designated states (Illinois, Indiana, and Ohio).
• Utilize marketing materials provided by Fresh Beverages LLC.
• Purchase the product at a wholesale rate of $1.50 per can.
• Maintain a minimum order quantity of 10,000 cans per month.

Notes: This agreement can include performance metrics, such as sales targets, to ensure that the sub-licensee meets their obligations. Additionally, consider specifying the duration of the agreement and renewal options.

Example 3: Trademark Sub-License Agreement

Context: A fashion brand (Licensee) owns a trademark and wants to allow a manufacturer (Sub-Licensee) to produce clothing items bearing that trademark.

Style Icons Ltd. holds the trademark for a popular clothing line and has entered into a licensing agreement with Trendy Textiles to manufacture and sell clothing items under the Style Icons brand. To expand production, Style Icons Ltd. grants a Sub-License Agreement to Fashion Factory to produce specific garments.

In this Sub-License Agreement, Fashion Factory is permitted to:

• Manufacture t-shirts and hoodies featuring the Style Icons trademark.
• Sell these items through their online store and physical locations.
• Pay Style Icons Ltd. a royalty of 10% on sales.
• Use the brand’s promotional images in their marketing campaigns.

Notes: The agreement should define the quality standards that Fashion Factory must adhere to when producing items. It’s also essential to include termination clauses if the quality standards are not met or sales targets are not achieved.