Technology license agreement

curl -X POST https://dealroom.todo.law/api/v1/agent/contracts \
  -H "Authorization: Bearer drk_YOUR_KEY" \
  -H "Content-Type: application/json" \
  -H "Idempotency-Key: $(uuidgen)" \
  -d '{
    "contractType": "TECHNOLOGY_LICENSE",
    "governingLaw": "ENGLAND_WALES",
    "language": "en",
    "party": {
      "legalName": "Your company"
    },
    "counterparty": {
      "legalName": "The other company"
    },
    "terms": {
      "technology-description": "<technology-description>"
    },
    "inline": "md"
  }'

What it is and when it is used

A technology license agreement is used when the owner of a technology (software, algorithms, a platform or a patented invention) allows another business to use it on agreed terms, usually in return for a fee or royalties, while keeping ownership. It suits licensing out proprietary technology, licensing in technology a business depends on (where escrow and insolvency protection matter), cross-border deals in which export control and sanctions apply, and royalty structures that need audit and minimum-payment rules.

If ownership is to be transferred outright, use an IP assignment agreement; if the software has yet to be built, use a software development agreement.

Who signs it and in which role

Two parties sign:

• The Licensor, who owns the technology and grants the licence.
• The Licensee, who receives the right to use it and pays for it.

The parties describe the licensed technology (required) and may add the licence fee, a royalty rate as a percentage of net revenue, the territory (worldwide by default), the term in years (3 by default) and a minimum annual guarantee.

Key clauses

License scope

An exclusive licence, a non-exclusive licence, a sole licence (no other licensees, but the licensor may still use the technology), or a licence limited to a field of use such as an industry or application, leaving the licensor free to license other fields.

Fee structure

A single lump-sum payment, a running royalty on net revenue, a hybrid of an upfront payment plus royalties, or royalties with a guaranteed minimum annual payment.

Sublicensing rights

No sublicensing (the licence is personal to the licensee), sublicensing with the licensor's prior written consent that may not be unreasonably withheld, or free sublicensing without consent.

Source code access

No access (object code only), escrow with an independent agent, or full delivery of the source code from the outset. Under the escrow option the licensor deposits the source code with build instructions, documentation and dependency lists within 30 days and updates the deposit after each material release; release is tied to the events described in the questions above, never to the mere opening of insolvency proceedings.

Warranty and support

Technology supplied as is, with no warranty; a limited 12-month warranty that the technology materially conforms to its specifications, with repair or replacement as the sole remedy; or a comprehensive warranty with ongoing support, including bug fixes, security patches and helpdesk access during the term.

Ownership of improvements

The licensor owns all improvements, the licensee owns its own improvements, or improvements are jointly owned.

Term and renewal

A fixed term that ends unless the parties negotiate a renewal, automatic renewal unless either party gives notice, or a perpetual licence that ends only for cause.

Termination rights

Termination only for a material breach left uncured after notice, termination for convenience by either party on written notice, or termination for material breach with an extended 60-day cure period plus immediate termination for specified critical breaches.

Liability cap

A mutual cap at the licence fees paid or payable in the previous twelve months, the same cap with unlimited liability for IP infringement (so the licensor carries the full risk if the technology infringes third-party rights), or tiered caps with a higher limit for IP and confidentiality claims.

Audit rights

No audit right, an annual audit at the licensor's cost unless discrepancies are found, or audits only on reasonable suspicion of underpayment or unauthorised use, with no limit on frequency.

Export control and sanctions

Each party complies with the rules that apply to it and the licensor cooperates with classification requests (the default); the licensor certifies the export classification of the technology and keeps it current, so the licensee can rely on it; or, for technology that is actually controlled, both parties run documented trade-compliance programmes with sanctions screening, end-use certificates and controls on access by foreign nationals.

The standard terms also cover the grant of the licence, the licensor's reservation of all other rights, restrictions on use (including reverse engineering, except as the law permits), delivery within 30 days with help on installation, and the licensee's duty to keep records of use and net revenue for three years.

What the two sides usually negotiate

The licensor generally prefers a non-exclusive licence, a minimum guarantee, no sublicensing, no source code access, an as-is warranty, ownership of all improvements and audits on suspicion. The licensee generally prefers exclusivity, a running royalty, free sublicensing, full source code delivery, a comprehensive warranty with support, ownership of its own improvements, a perpetual licence, unlimited licensor liability for IP infringement, no audits and a classification certified by the licensor.

When the two sides disagree, Dealroom proposes the balanced positions in the skill:

• Fees: an upfront payment plus royalties.
• Improvements: joint ownership.
• Termination: for cause only.
• Liability: a mutual cap at the licence fees.
• Export control: mutual compliance with cooperation on classification.

On scope, sublicensing, source code, warranty, term and audit there is no fully neutral option; a sole or field-of-use licence, sublicensing with consent, escrow, the limited 12-month warranty, automatic renewal and an annual audit are the positions closest to the middle.

Jurisdictions and languages Dealroom supports for it

Dealroom drafts this agreement under the law of California, England and Wales and Spain, in English or Spanish.

• California: disputes go to the courts of San Francisco County and the parties waive a jury trial. Reverse engineering is subject to state and federal trade secret law, and the agreement records that the licensee keeps its rights under section 365(n) of the Bankruptcy Code, including under an escrow agreement.
• England and Wales: the licensee's statutory rights to make a back-up copy, to decompile for interoperability and to observe, study and test the program are preserved, and any term restricting them is void. Liability for fraud, death or personal injury caused by negligence is never excluded, and any database right is licensed on the same terms.
• Spain: the agreement applies the Intellectual Property Law and the Patent Law 24/2015, preserves the lawful user's rights under article 100 of the Intellectual Property Law, allows registration of the licence where required or requested, and sends disputes to the courts of the licensor's registered office. Under the Insolvency Law, the declaration of insolvency is not a ground for termination.

Common mistakes

• Escrow that releases on the insolvency filing. In all three jurisdictions such triggers are void, restricted or ineffective; tie release to cessation of performance or an uncured breach.
• No export control clause for controlled technology. Source code access by foreign nationals can be an export in itself.
• As-is disclaimers that ignore statutory floors. Back-up, decompilation and testing rights for software cannot be removed by contract in England and Wales or in Spain.
• Citing the old EU technology transfer block exemption. The skill notes that Regulation 316/2014 expired on 30 April 2026 and has been replaced, with a parallel new order in the United Kingdom.
• Patent royalties that run past patent expiry in the United States. They are unenforceable there; use step-downs or separate know-how rates.
• Citing the wrong article of the Spanish Patent Law. Registration and effect against third parties are governed by article 79.2, not article 83.