# License Grant Clause

Source: https://contracko.com/clause-library/license-grant

# License Grant Clause

Grants the right to use IP on defined terms: scope, exclusivity, territory, duration and permitted uses.

## What it is

A license grant gives one party permission to use another's intellectual property without transferring ownership. Its core variables are scope (what can be done), exclusivity, territory, duration, sublicensing rights and whether the licence is revocable.

## Why it matters

The grant's precise wording defines exactly what the licensee may lawfully do; anything outside it can be infringement. Vague scope or silent exclusivity leads to disputes over field of use, channels and competing licences.

## How to apply it

- Specify scope, exclusivity, territory, term and any sublicensing right.
- State whether the licence is perpetual or terminates with the agreement.
- Clarify rights on termination and any survival of granted licences.
- Tie continued use to payment and compliance with usage restrictions.

## Negotiation tips

- • Licensees should seek the broadest scope and a perpetual licence for paid deliverables.
- • Licensors should keep the grant non-exclusive and limited to the agreed field of use.

## Common pitfalls

- • Silence on exclusivity, leaving it unclear whether the licensor can license rivals.
- • No sublicensing rule, blocking the licensee's legitimate downstream use.

### How Contracko helps

Contracko's AI review extracts licence scope, exclusivity and duration from your contracts and flags missing sublicensing rules or silent perpetuity provisions. All licence-bearing agreements are stored in one searchable repository so you can quickly audit which licences are exclusive, verify territorial limits and check whether any are conditional on ongoing payment, avoiding accidental use-rights gaps across your portfolio.

## Legal references

- Copyright Act: licensing of works (Auteurswet)
- [BW 6:248 Reasonableness and fairness in interpretation Dutch law](https://wetten.overheid.nl/BWBR0005289)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[Software & SaaS](https://contracko.com/industries/software-saas)[Music](https://contracko.com/industries/music-industry)[Gaming & Esports](https://contracko.com/industries/gaming-esports)[Film & TV](https://contracko.com/industries/film-tv)[B2B SaaS Companies](https://contracko.com/industries/b2b-saas)

## Related clauses

- [Intellectual Property Clause](https://contracko.com/clause-library/intellectual-property)
- [Confidentiality Clause](https://contracko.com/clause-library/confidentiality)
- [Assignment Clause](https://contracko.com/clause-library/assignment)

## Related terms

- [License](https://contracko.com/glossary/license)
- [Intellectual property](https://contracko.com/glossary/intellectual-property)
- [Clause](https://contracko.com/glossary/clause)

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## Frequently asked questions

Common questions about this clause.

- **Q:** What is the difference between an exclusive and non-exclusive licence?
  **A:** An exclusive licence bars the licensor from granting the same rights to anyone else (and sometimes from using them itself); a non-exclusive licence does not.

- **Q:** Does a licence survive termination of the contract?
  **A:** Only if expressly stated. State whether the grant is perpetual or ends with the agreement to avoid disputes over continued use.

- **Q:** Can a licensee sublicense without express permission?
  **A:** Generally no. Sublicensing requires an express grant; without it, passing the licensed material to a group company or service provider can constitute infringement.

- **Q:** What is a field-of-use restriction?
  **A:** A field-of-use restriction limits the licence to a defined purpose or market, for example pharmaceutical use only. Using the IP outside that field can constitute infringement even if the licensee paid for an otherwise broad grant.

- **Q:** Can the licensor revoke the licence before it expires?
  **A:** Only on grounds set out in the licence, such as non-payment or material breach. A perpetual licence without termination grounds is difficult to revoke unilaterally under Dutch law.

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