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Utility Model License Agreement

This Utility Model License Agreement ("Agreement") governs the terms and conditions under which the Licensor grants the Licensee rights to use a registered utility model. It is designed specifically for jurisdictions where utility models are recognized, and it incorporates provisions tailored to their unique characteristics (e.g., shorter protection terms, limited inventive step requirements).


Utility Model License Agreement

Date: [DATE]
Licensor: [NAME], a company/individual organized under the laws of [JURISDICTION], with its principal place of business at [ADDRESS].
Licensee: [NAME], a company/individual organized under the laws of [JURISDICTION], with its principal place of business at [ADDRESS].

The Licensor and Licensee are collectively referred to as the "Parties" and individually as a "Party."


1. Definitions

1.1. Licensed Utility Model:
The utility model described in Exhibit A, including any modifications, extensions, or additional registrations filed during the term of this Agreement.

1.2. Licensed Territory:
The geographical area where the Licensee is authorized to use the Licensed Utility Model, defined as [e.g., worldwide, Germany, European Union].

1.3. Field of Use:
The specific applications or industries in which the Licensed Utility Model may be utilized, defined as [e.g., consumer electronics].


2. Grant of License

2.1. License Type:
The Licensor grants the Licensee a [exclusive/non-exclusive] license to manufacture, use, sell, and distribute products incorporating the Licensed Utility Model within the Licensed Territory and Field of Use.

2.2. Sub-Licensing:
The Licensee [is/is not] authorized to grant sub-licenses for the Licensed Utility Model.
Alternative Clause: Sub-licensing is subject to the prior written consent of the Licensor.

2.3. Improvements:

  • Any improvements to the Licensed Utility Model made by the Licensee during the term of this Agreement shall [be shared with the Licensor/be owned solely by the Licensee].
  • Improvements made by the Licensor shall automatically be included in the license grant.

2.4. Non-Transferability:
This license is non-transferable unless explicitly agreed upon in writing by the Licensor.


3. Term and Termination

3.1. Term:
This Agreement shall remain in effect until the expiration of the Licensed Utility Model, unless terminated earlier as per this Agreement.

3.2. Termination for Breach:
Either Party may terminate this Agreement upon [e.g., 30 days] written notice if the other Party fails to cure a material breach of its obligations.

3.3. Termination for Insolvency:
The Licensor may terminate this Agreement if the Licensee becomes insolvent or enters into bankruptcy proceedings.

3.4. Post-Termination Obligations:

  • The Licensee must cease all use of the Licensed Utility Model upon termination.
  • Any products already manufactured may be sold off for [e.g., six months] under the terms of this Agreement.


4. Payments

4.1. Upfront Fee:
The Licensee shall pay the Licensor a one-time, non-refundable upfront fee of [AMOUNT].

4.2. Running Royalties:
The Licensee shall pay royalties of [PERCENTAGE, e.g., 5%] on net sales of products incorporating the Licensed Utility Model.

Optional Clause – Minimum Royalties:
4.3. The Licensee shall pay a minimum annual royalty of [AMOUNT], regardless of actual sales.

Optional Clause – Milestone Payments:
4.4. The Licensee shall make additional payments upon achieving the following milestones:

  • [E.g., €50,000 upon launch of the first product].
  • [E.g., €100,000 upon reaching €1,000,000 in annual sales].


5. Confidentiality

5.1. Confidential Information:
All technical and commercial information related to the Licensed Utility Model provided by the Licensor shall be treated as confidential.

5.2. Obligations of the Licensee:
The Licensee shall take all reasonable steps to protect the confidentiality of the Licensed Utility Model and shall not disclose it to third parties without the Licensor’s consent.

5.3. Duration of Confidentiality:
Confidentiality obligations shall survive the termination of this Agreement for [e.g., five years].


6. Representations and Warranties

6.1. Licensor Warranties:
The Licensor warrants that:

  • It holds valid and enforceable rights to the Licensed Utility Model.
  • The Licensed Utility Model does not infringe third-party rights to the best of the Licensor's knowledge.

6.2. Licensee Warranties:
The Licensee warrants that:

  • It will use the Licensed Utility Model in compliance with applicable laws.
  • It will not challenge the validity of the Licensed Utility Model during the term of this Agreement.

6.3. Indemnification:
The Licensee agrees to indemnify the Licensor against claims arising from the Licensee’s use of the Licensed Utility Model.


7. Reporting and Audit

7.1. Reports:
The Licensee shall submit quarterly reports detailing net sales, royalties owed, and activities involving the Licensed Utility Model.

7.2. Audit Rights:
The Licensor may audit the Licensee’s records upon [reasonable notice/every six months] to verify compliance with payment obligations.


8. Governing Law and Dispute Resolution

8.1. Governing Law:
This Agreement shall be governed by the laws of [e.g., Germany, New York State].

8.2. Dispute Resolution:
Any disputes shall be resolved through [e.g., arbitration under ICC rules, litigation in the courts of [JURISDICTION]].


9. Miscellaneous

9.1. Entire Agreement:
This Agreement constitutes the entire understanding between the Parties and supersedes all prior agreements.

9.2. Force Majeure:
Neither Party shall be liable for delays caused by events beyond their reasonable control.

9.3. Amendments:
Any amendments to this Agreement must be made in writing and signed by both Parties.


Exhibit A – Licensed Utility Model

  • Utility Model Registration No. [123456]: [Title/Description].
  • Filing Date: [DATE].
  • Expiry Date: [DATE].


Best Practices for Utility Model License Agreements

  1. Consider Shorter Protection Terms:
    Since utility models typically have shorter protection durations than patents, structure royalties and milestones accordingly.

  2. Validate the Utility Model:
    Ensure the Licensed Utility Model is valid and enforceable, as utility models often undergo less rigorous examination than patents.

  3. Confidentiality for Know-How:
    Include robust confidentiality clauses if the utility model involves proprietary know-how not covered by registration.

  4. Territorial Limitations:
    Focus on jurisdictions where the utility model is registered, as rights are territorial.

  5. Compliance with Local Laws:
    Tailor the agreement to reflect the specific legal framework governing utility models in relevant jurisdictions.

 

 

 

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