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Licensing Agreement Template for Malaysia

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Licensing Agreement

I need a licensing agreement for a software product that will be distributed in Malaysia, with terms that include a non-exclusive license, a one-time licensing fee, and a clause for annual maintenance and support. The agreement should also address intellectual property rights, limitations on liability, and termination conditions.

What is a Licensing Agreement?

A Licensing Agreement lets you legally use someone else's intellectual property rights in exchange for payment or other benefits. In Malaysia, these contracts commonly cover trademarks, patents, copyrights, and trade secrets - all protected under the Intellectual Property Corporation of Malaysia (MyIPO) framework.

These agreements spell out exactly how you can use the licensed property, for how long, and in which territories. They're essential for Malaysian businesses wanting to use foreign brands, technology, or creative works, and must comply with the Contracts Act 1950. Common examples include software licenses, franchise arrangements, and manufacturing rights for patented products.

When should you use a Licensing Agreement?

Get a Licensing Agreement in place before using any intellectual property that belongs to someone else. This applies when you want to use another company's trademark, patent, or copyrighted material in Malaysia - from selling products under a known brand to implementing protected technology in your manufacturing process.

Malaysian businesses need these agreements when joining international franchise systems, developing software using third-party code, or manufacturing products using someone else's patents. The agreement protects both parties under Malaysian IP laws and the Contracts Act 1950, helping avoid costly disputes and ensuring proper compensation for IP use.

What are the different types of Licensing Agreement?

Who should typically use a Licensing Agreement?

  • IP Owners/Licensors: Companies, inventors, or creators who own intellectual property rights and want to monetize them while maintaining control
  • Licensees: Malaysian businesses seeking to use protected IP, including manufacturers, software companies, and franchise operators
  • Corporate Lawyers: Draft and review agreements to ensure compliance with Malaysian IP laws and protect their clients' interests
  • IP Consultants: Advise on licensing terms, royalty structures, and negotiations between parties
  • MyIPO Officials: Oversee IP registration and enforce regulations that affect licensing arrangements in Malaysia

How do you write a Licensing Agreement?

  • IP Details: Confirm ownership rights, registration numbers, and scope of intellectual property being licensed
  • Usage Terms: Define exactly how the IP can be used, in which territories, and for what duration
  • Payment Structure: Determine royalty rates, payment schedules, and any minimum guaranteed amounts
  • Party Information: Gather complete business details of both licensor and licensee, including registration numbers
  • Compliance Check: Review MyIPO regulations and Malaysian Contract Act requirements for your specific industry
  • Document Generation: Use our platform to create a legally sound agreement that includes all mandatory elements under Malaysian law

What should be included in a Licensing Agreement?

  • Parties' Details: Full legal names, registration numbers, and addresses of licensor and licensee
  • IP Description: Clear identification of licensed intellectual property, including registration numbers and scope
  • Usage Rights: Specific terms of use, territorial limits, and duration of the license
  • Financial Terms: Payment amounts, schedules, and calculation methods for royalties
  • Quality Control: Standards for IP use and monitoring procedures
  • Termination Clause: Conditions for ending the agreement and post-termination obligations
  • Governing Law: Malaysian law application and jurisdiction statement
  • Dispute Resolution: Clear procedures for handling disagreements under Malaysian arbitration rules

What's the difference between a Licensing Agreement and an Assignment Agreement?

A Licensing Agreement differs significantly from an Assignment Agreement in how intellectual property rights are transferred. While both deal with IP rights under Malaysian law, they serve distinct purposes and create different legal relationships.

  • Ownership Transfer: Assignment Agreements permanently transfer all IP rights to the new owner, while Licensing Agreements only grant permission to use the IP while the original owner maintains ownership
  • Duration: Licenses typically have specific time limits and renewal terms, whereas assignments are permanent transfers
  • Control Rights: Licensors maintain quality control and can restrict usage, but assignors give up these rights completely
  • Payment Structure: Licensing usually involves ongoing royalties or periodic payments, while assignments typically require a one-time payment
  • Legal Requirements: Under Malaysian IP laws, assignments must be registered with MyIPO, while many licenses don't require registration

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