An IP owner may choose to license its IP to a third party. This can be an effective route to generating revenue while maintaining Ownership of valuable rights. The terms upon which the IP owner (licensor) grants rights to a licensee often include a clause determining if the licensee may, in turn, grant a sub-licence of the IP right(s) to a third party.

This Practice Note covers:

1. •

   Right to sub-license—statutory position for patents, trade marks, copyright and designs

2. •

   Why sub-license IP rights?—advantages and disadvantages

3. •

   Sub-licensing—key terms and considerations

4. •

   Checklist—key questions for drafting

For an introduction to IP licensing in general, see Practice Notes: Licensing Intellectual Property Rights, Exploiting intellectual property rights and Q&A: What are the key practical issues for a business to consider when exploiting its intellectual property rights? For more in-depth Practice Notes on licensing individual IP rights please see the relevant IP section below.

A note on terminology: in this Practice Note, references to the ‘head licence’ refer to the initial licence agreement between the licensor and licensee. References