License
Permission to use intellectual property under defined conditions without transferring ownership.
Definition
A license grants permission to use protected intellectual property (such as software, content, or a trademark) while ownership stays with the licensor. Licenses are defined by scope: exclusive or non-exclusive, territory, duration, permitted uses, and whether sublicensing is allowed. Breaching the scope can be both a contract breach and an act of IP infringement.
Example
A SaaS contract grants a non-exclusive, non-transferable license to use the software for the customer's internal business only.
Why this is a business risk
Using licensed IP outside the permitted scope, whether in a different territory, for an extra purpose, or by sublicensing without permission, can be both a contract breach and an act of infringement. Companies that grow through acquisition or group restructuring often inadvertently violate license scope restrictions that were never updated.
How to manage it
- Map the exact scope of each key license: territory, duration, permitted uses, exclusivity, and sublicensing rights.
- Check at each business event (acquisition, new product, new geography) whether existing licenses cover the new use case.
- Track license expiry dates with reminders so you do not unknowingly operate after a license has expired.
Frequently asked questions
Common questions about this term.