Product & Technology License Term Sheet Template

Product Distribution & Reseller License

Distribution is the process of making a product or service available for the consumer or business user that needs it. This can be done directly by the producer or service provider, or using indirect channels with intermediaries.

Typical intermediaries involved in distribution include:

  • Wholesaler: A merchant intermediary who sells chiefly to retailers, other merchants, or industrial, institutional, and commercial users mainly for resale or business use. Wholesalers typically sell in large quantities. (Wholesalers, by definition, do not deal directly with the public).
  • Retailer: A merchant intermediary who sells direct to the public or individual businesses. There are many different types of retail outlet – from hypermarts and supermarkets to small, independent stores.
  • Agent: An intermediary who is authorised to act for a principal in order to facilitate exchange. Unlike merchant wholesalers and retailers, agents do not take title to goods, but simply put buyers and sellers together. Agents are typically paid via commissions by the principal. For example, travel agents are paid a commission for each booking made with an airline or hotel operator.

Technology Development or Sharing License

A significant part of strategic collaboration, for example, is cross licensing of the parties’ Intellectual Property (IP) so that each party can cooperatively develop, manufacture and market products for their mutual benefit. Technology licensing only occurs when one of the parties owns valuable IP, and because of that ownership, has the legal right to prevent the other party from using it. A license is a consent by the owner to the use of IP in exchange for money or something else of value.

Technology licensing does not occur when there is no IP. However, IP is a broad concept and includes many different intangibles (e.g. patents (inventions), copyright (works of authorship including technical manuals, software, specifications, formulas, schematics, and documentation, among other things), know-how (e.g. expertise, skilled craftsmanship, training capability, understanding of how something works), trade secrets (a protected formula or method, undisclosed customer or technical information, algorithms, etc.), trademarks (logos, distinctive names for products and services), industrial designs (the unique way a product looks such as a computer’s molding), and semiconductor mask works (the physical design of semiconductor circuits).

Exclusive or Non-Exclusive LOI

Product Distribution License Template                           

Reseller License Template                                                 

Technology Development License Template