Licensing Agreement (Australia)
This Licensing Agreement (the "Agreement") is made on [Agreement Date] between:
[Licensor Name] (ABN [Licensor ABN]) of [Licensor Address], [Licensor Suburb], [Licensor State] [Licensor Postcode] (the "Licensor"); and
[Licensee Name] (ABN [Licensee ABN]) of [Licensee Address], [Licensee Suburb], [Licensee State] [Licensee Postcode] (the "Licensee").
The Licensor and the Licensee are referred to collectively as the "Parties".
BACKGROUND
A. The Licensor is the owner of the intellectual property described in this Agreement and has the right and authority to grant licences in respect of that intellectual property.
B. The Licensee wishes to obtain a licence to use the Licensed IP on the terms and conditions set out in this Agreement.
C. This Agreement is intended to comply with the Patents Act 1990 (Cth), Trade Marks Act 1995 (Cth), Copyright Act 1968 (Cth), Designs Act 2003 (Cth), the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)), and the general law of [Governing State].
NOW, THEREFORE, the Parties agree as follows:
1. DEFINITIONS
In this Agreement, the following terms have the following meanings:
- "Licensed IP" means [IP Type]: [IP Description] (Registration/Application No. [IP Registration Number], if applicable).
- "Territory" means [Licence Territory].
- "Permitted Use" means [Permitted Use].
- "Term" means [Licence Term], commencing on the date of this Agreement.
- "Royalty" or "Licence Fee" means the amounts payable under clause 4 of this Agreement.
- "Net Sales Revenue" means gross invoiced sales of licensed products or services, less trade discounts actually granted, returns, sales taxes (including GST), and freight charges separately itemised.
2. GRANT OF LICENCE
2.1 Subject to the terms and conditions of this Agreement, the Licensor grants to the Licensee a [Licence Type] licence to use the Licensed IP in the Territory for the Permitted Use during the Term.
2.2 This licence does not transfer ownership of the Licensed IP. The Licensor retains full ownership of the Licensed IP and all intellectual property rights in it. Nothing in this Agreement operates as an assignment of the Licensed IP.
2.3 The Licensee must use the Licensed IP only for the Permitted Use and must not use the Licensed IP outside the Territory or outside the scope of the Permitted Use without the Licensor's prior written consent.
2.4 Sublicensing: The Licensee's right to sublicence is [Sublicence Allowed]. Where sublicensing is permitted, the Licensee must ensure any sublicensee is bound by terms no less protective of the Licensor's rights than the terms of this Agreement. The Licensee remains liable to the Licensor for the obligations of any sublicensee.
2.5 The Licensee must not reverse engineer, decompile, or disassemble the Licensed IP, or use the Licensed IP in any manner that would derogate from or adversely affect the Licensor's intellectual property rights.
3. IP OWNERSHIP AND IMPROVEMENTS
3.1 The Licensor warrants that: (a) it is the owner of the Licensed IP or has authority to grant the licence in this Agreement; (b) the Licensed IP does not, to the best of its knowledge, infringe the intellectual property rights of any third party in the Territory; and (c) it has not granted any licence inconsistent with the rights granted to the Licensee in this Agreement.
3.2 Any improvement, modification, or derivative of the Licensed IP created by or on behalf of the Licensee during the Term shall vest in and be owned by the Licensor upon creation. The Licensee hereby assigns to the Licensor all right, title, and interest in any such improvements and agrees to execute any documents necessary to give effect to such assignment.
3.3 The Licensee must promptly notify the Licensor in writing of any improvement, modification, or enhancement to the Licensed IP that the Licensee develops or becomes aware of during the Term.
3.4 For copyright works forming part of the Licensed IP, the Licensor (where it is also the author or creator) hereby consents under section 195AWA of the Copyright Act 1968 (Cth) to the acts of the Licensee in using the Licensed IP as permitted by this Agreement, including any adaptation or modification within the scope of the Permitted Use.
4. ROYALTIES AND PAYMENT
4.1 In consideration for the licence granted in clause 2, the Licensee shall pay the Licensor [Royalty Amount], calculated on a [Royalty Structure] basis. All amounts are [GST Treatment].
4.2 Royalties or licence fees are payable [Royalty Payment Frequency]. The Licensee must provide the Licensor with a royalty statement accompanying each payment, setting out in reasonable detail the basis for the calculation of the royalty.
4.3 The Licensor (if registered for GST) will issue a valid tax invoice to the Licensee for each taxable supply made under this Agreement, including the Licensor's ABN and the GST component, in compliance with the A New Tax System (Goods and Services Tax) Act 1999 (Cth). The Licensee may claim an input tax credit for GST paid on royalties if the Licensee is registered for GST and the licence is acquired for a creditable purpose.
4.4 If any payment is not made by the due date, the Licensor may charge interest on the overdue amount at 10% per annum, calculated daily from the due date until the date of actual payment.
4.5 Audit rights: The Licensor may, on not less than 14 days' written notice, audit the Licensee's books and records to verify the accuracy of royalty calculations. If an audit reveals that royalties have been understated by more than 5%, the Licensee must pay the costs of the audit.
5. IP MAINTENANCE AND ENFORCEMENT
5.1 The Licensor is responsible for maintaining and renewing all registrations constituting the Licensed IP at its own cost during the Term, including payment of all maintenance fees and renewal fees required under the Patents Act 1990 (Cth), Trade Marks Act 1995 (Cth), or Designs Act 2003 (Cth) as applicable.
5.2 The Licensee must promptly notify the Licensor in writing if the Licensee becomes aware of any actual, suspected, or threatened infringement of the Licensed IP by any third party.
5.3 The Licensor has the primary right (but not the obligation) to take enforcement action against infringers of the Licensed IP. If the Licensor declines to take enforcement action within 60 days of receiving the Licensee's notice, the Licensee (if an exclusive licensee) may, with the Licensor's written consent, take action in its own name with the Licensor joined as a party.
5.4 The Licensee must not make any admission, settlement, or compromise relating to the Licensed IP without the Licensor's prior written consent.
6. CONFIDENTIALITY
6.1 Each Party (the "Receiving Party") must keep confidential all information disclosed by the other Party (the "Disclosing Party") in connection with this Agreement that is identified as confidential or that a reasonable person would recognise as confidential, including technical know-how, trade secrets, financial information, and business strategies ("Confidential Information").
6.2 The Receiving Party must not disclose Confidential Information to any third party without the Disclosing Party's prior written consent, except to employees, officers, and professional advisers who have a need to know and who are bound by equivalent confidentiality obligations.
6.3 The obligations in this clause survive termination or expiry of this Agreement for a period of 5 years.
7. TERM AND TERMINATION
7.1 This Agreement commences on the date of execution and continues for the Term unless earlier terminated in accordance with this clause.
7.2 Either Party may terminate this Agreement immediately by written notice if: (a) the other Party commits a material breach of this Agreement that is not remedied within 30 days of written notice specifying the breach; (b) the other Party becomes insolvent, enters external administration, or ceases to carry on business; or (c) the other Party challenges the validity or ownership of the Licensed IP.
7.3 The Licensor may terminate this Agreement immediately by written notice if the Licensee fails to pay any royalty or licence fee within 14 days after the due date.
7.4 Upon termination or expiry of this Agreement, the Licensee must immediately cease using the Licensed IP, return or destroy all materials incorporating the Licensed IP, and certify in writing to the Licensor that it has done so. All royalties accrued before termination remain due and payable.
8. LIMITATION OF LIABILITY AND AUSTRALIAN CONSUMER LAW
8.1 Nothing in this Agreement excludes, restricts, or modifies any right, remedy, guarantee, warranty, or other term implied or imposed by the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)) that cannot lawfully be excluded or limited.
8.2 To the maximum extent permitted by law, the Licensor's aggregate liability to the Licensee for any claim arising under or in connection with this Agreement is limited to the total royalties paid by the Licensee under this Agreement in the 12 months preceding the relevant claim.
8.3 Neither Party is liable for any indirect, special, consequential, or economic loss arising under or in connection with this Agreement, to the maximum extent permitted by law.
9. GENERAL PROVISIONS
9.1 Entire Agreement: This Agreement constitutes the entire agreement between the Parties with respect to the subject matter and supersedes all prior representations and agreements.
9.2 Amendments: This Agreement may only be amended by a written instrument signed by both Parties.
9.3 Independent Contractors: Each Party is an independent contractor. Nothing in this Agreement creates an employment relationship, partnership, joint venture, or agency between the Parties.
9.4 Dispute Resolution: If a dispute arises, the Parties must attempt good-faith negotiation within 21 days of written notice. If unresolved, either Party may refer the matter to mediation administered by the Australian Disputes Centre (ADC) or a similar body before commencing legal proceedings.
9.5 Governing Law: This Agreement is governed by the laws of [Governing State], Australia. Each Party irrevocably submits to the non-exclusive jurisdiction of the courts of [Governing State] and the Federal Court of Australia.
9.6 Severability: If any provision is invalid or unenforceable, the remaining provisions continue in full force and effect.
9.7 Waiver: A Party does not waive a right simply by failing to exercise it or by delay. A waiver must be in writing to be effective.
EXECUTED as an Agreement.
LICENSOR
Name: [Licensor Name]
ABN: [Licensor ABN]
Address: [Licensor Address], [Licensor Suburb], [Licensor State] [Licensor Postcode]
LICENSEE
Name: [Licensee Name]
ABN: [Licensee ABN]
Address: [Licensee Address], [Licensee Suburb], [Licensee State] [Licensee Postcode]
Licensor
________________
Signature
Date: ________________
Licensee
________________
Signature
Date: ________________
What Is a Licensing Agreement (Australia)?
A Licensing Agreement in Australia grants a licensee permission to use specified intellectual property on defined terms, fees, and territory while the owner retains ownership under the Corporations Act 2001 (Cth).
In Australia, intellectual property rights are protected by a suite of Commonwealth legislation. The Patents Act 1990 (Cth) protects inventions for up to 20 years (standard patent) or 8 years (innovation patent, now closed to new applications). The Trade Marks Act 1995 (Cth) protects registered signs that distinguish the goods or services of one trader from those of another, with registration renewable every 10 years. The Copyright Act 1968 (Cth) automatically protects original literary, artistic, musical, and dramatic works as well as films, sound recordings, and computer programs, for the life of the author plus 70 years. The Designs Act 2003 (Cth) protects the visual features of manufactured products for up to 10 years from registration. Any of these IP assets — and confidential information or technical know-how — can be the subject of a Licensing Agreement.
A Licensing Agreement must identify the specific IP being licensed, state whether the licence is exclusive, non-exclusive, or sole, define the territory and permitted use, specify the royalty structure and payment terms, address GST obligations, allocate IP maintenance responsibilities, regulate sublicensing, address ownership of improvements, and set out termination rights. A well-drafted agreement also includes confidentiality obligations to protect technical know-how and trade secrets disclosed to enable the Licensee to exercise the licence.
Bundle licences — which cover a package of IP rights such as a patent, related trade mark, software, and accompanying know-how — are common in franchise, technology transfer, and manufacturing licensing contexts.
The legal framework governing the Licensing Agreement (Australia) in Australia draws on several key statutes and regulatory bodies. Under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission (ASIC) regulates companies and financial services. Section 127 of the Corporations Act 2001 governs company execution of documents. The Australian Competition and Consumer Commission (ACCC) enforces the Competition and Consumer Act 2010 (Cth). The Australian Taxation Office (ATO) administers the Goods and Services Tax under the A New Tax System (Goods and Services Tax) Act 1999. The Federal Court of Australia and Supreme Courts of each state have jurisdiction over corporate disputes. Parties executing a Licensing Agreement (Australia) in Australia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Corporations Act 2001 (Cth) sets the foundational requirements.
When Do You Need a Licensing Agreement (Australia)?
A Licensing Agreement is required whenever a business or individual wishes to commercialise intellectual property owned by another party, or to grant a third party the right to use their own IP assets. This document is essential in a wide range of commercial scenarios across Australian industries.
A technology company that has developed proprietary software, algorithms, a patented process, or specialised technical know-how may enter into a licensing agreement to monetise those assets without transferring ownership. A manufacturer holding a registered trade mark or patent may licence those rights to a distributor or production partner, enabling them to market or manufacture products in a designated territory while the IP owner retains control over quality and brand integrity.
Franchise arrangements typically involve a licensing agreement by which the franchisee is granted a licence to use the franchisor's trade marks, business systems, copyright materials, and know-how. Licensing agreements are fundamental to the franchise model under Australian franchise law and the Franchising Code of Conduct.
In the resources, agricultural, and manufacturing sectors, businesses frequently licence patented technology or proprietary processes to local operators or joint venture partners. Universities and research institutions regularly licence patented inventions, copyright software, and technical know-how to commercial partners for product development and commercialisation under research commercialisation agreements.
A Licensing Agreement is also appropriate when a business wishes to expand into new geographic markets by appointing a licensee in that territory, or when a rights owner wants to generate recurring royalty income from IP assets that would otherwise remain unused. In Australia's media and entertainment sector, music publishers, film studios, and content creators routinely licence their catalogues to streaming platforms, broadcasters, and distributors.
Without a written Licensing Agreement, the scope of the licence, the royalty entitlement, ownership of improvements, and termination rights are all uncertain — creating significant legal and commercial risk for both parties.
What to Include in Your Licensing Agreement (Australia)
A thorough Australian Licensing Agreement must address several key elements to be legally effective and commercially protective for both parties.
Identification of the Licensed IP: The agreement must precisely identify the intellectual property being licensed, including registration numbers, application numbers, filing dates, and a clear description of the IP. Vague or incomplete identification may make it impossible to determine what has been licensed.
Licence type and scope: The agreement must specify whether the licence is exclusive, non-exclusive, or sole. An exclusive licence bars even the Licensor from granting licences to others in the Territory; a sole licence bars further licensing to third parties but allows the Licensor to continue using the IP; a non-exclusive licence allows the Licensor to grant the same rights to multiple licensees.
Territory and permitted use: The geographic area within which the licence applies must be expressly defined. The permitted use must be described with sufficient specificity to prevent the Licensee from using the Licensed IP beyond what is intended — each unauthorised use may constitute infringement.
Royalties, payment, and audit rights: The royalty structure must clearly define how royalties are calculated (percentage of net sales, flat fee, or combination), when they are payable, what reporting obligations apply, and when the Licensor may audit the Licensee's accounts. GST of 10% generally applies to royalty payments.
Ownership of improvements: The agreement should expressly address who owns any improvements or modifications to the Licensed IP made by the Licensee during the licence term. Without express provision, disputes over improvement ownership are common and commercially costly.
IP maintenance and enforcement: The Licensor is generally responsible for maintaining registrations and renewing IP rights at its own cost. The Licensee should be obliged to notify the Licensor of any infringement and the agreement should allocate the right and obligation to take enforcement action.
Confidentiality: Where the licence involves the disclosure of technical know-how, trade secrets, or proprietary information, a strong confidentiality clause is essential to prevent the Licensee from using that information outside the scope of the licence or after termination.
Termination provisions: The agreement should clearly set out when each Party may terminate, what notice is required, what rights survive termination, and what the Licensee must do with materials incorporating the Licensed IP after termination.
Additional compliance elements for a Licensing Agreement (Australia) used in Australia include: Under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission (ASIC) regulates companies and financial services. Section 127 of the Corporations Act 2001 governs company execution of documents. The Australian Competition and Consumer Commission (ACCC) enforces the Competition and Consumer Act 2010 (Cth). The Australian Taxation Office (ATO) administers the Goods and Services Tax under the A New Tax System (Goods and Services Tax) Act 1999. The Federal Court of Australia and Supreme Courts of each state have jurisdiction over corporate disputes. Forms-legal.com provides this template as a starting point for Australia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Licensing Agreement (Australia) (Australia) [Legal document template]. Forms Legal. https://forms-legal.com/australia/business/intellectual-property/licensing-agreement-australia
"Licensing Agreement (Australia) (Australia)." Forms Legal, 2026, https://forms-legal.com/australia/business/intellectual-property/licensing-agreement-australia.
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title = {Licensing Agreement (Australia) (Australia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/australia/business/intellectual-property/licensing-agreement-australia}},
note = {Free legal document template. Based on Corporations Act 2001 (Cth)}
}Also available for these jurisdictions:
Frequently Asked Questions
A licence and an assignment are the two primary ways to deal with intellectual property rights under Australian law, and they have fundamentally different legal effects. An assignment transfers ownership of the IP from the assignor to the assignee permanently — after a valid assignment, the assignee becomes the new owner and the assignor has no further rights in the IP. An assignment of a registered trade mark must be in writing under s106 of the Trade Marks Act 1995 (Cth), and an assignment of a patent must be in writing under s14 of the Patents Act 1990 (Cth). In contrast, a licence does not transfer ownership — it grants the licensee a permission or right to use the IP on specified terms, while the licensor retains ownership. Licences are more flexible: they can be time-limited, territory-restricted, use-restricted, exclusive or non-exclusive, and are generally the preferred commercial mechanism when the owner wants to retain long-term control, derive ongoing royalty income, and licence the same IP to multiple parties in different markets or fields.
Royalties paid under an Australian licensing agreement are generally subject to Goods and Services Tax (GST) at 10% under the A New Tax System (Goods and Services Tax) Act 1999 (Cth), where the supply is made in the course of an enterprise and the licensor is registered (or required to be registered) for GST. The licensor must issue a tax invoice for each taxable supply and the licensee may claim an input tax credit if it is registered for GST and the licence is for a creditable purpose. Royalties must also be recognised as assessable income by the licensor under the Income Tax Assessment Act 1997 (Cth). Where royalties are paid to a non-resident licensor, the Australian licensee is generally required to withhold royalty withholding tax at 30% under s128B of the Income Tax Assessment Act 1936 (Cth), subject to a reduction under any applicable double tax treaty. Parties should obtain advice from a registered tax agent or solicitor regarding the income tax and GST treatment of specific royalty arrangements.
Yes, in most cases an exclusive licensee has standing to sue for infringement of the licensed IP in Australia. Under s119 of the Patents Act 1990 (Cth), an exclusive licensee may bring infringement proceedings in the Federal Court of Australia, with the licensor joined as a defendant if they are not a co-plaintiff. Under s10 of the Copyright Act 1968 (Cth), an exclusive licensee of copyright also has standing to commence infringement proceedings in their own right. For trade marks, a registered user may take action under s26 of the Trade Marks Act 1995 (Cth) if the licence is recorded on the Trade Marks Register, though the trade mark owner's consent is generally required. Non-exclusive licensees generally do not have independent standing to sue for infringement and must rely on the licensor to take action. This is a key reason why licensees negotiating high-value licences often seek exclusive licence terms, and why the distinction between exclusive, sole, and non-exclusive licences matters significantly in practice.
The ownership of improvements made by the licensee to the licensed IP during the licence term is determined by the terms of the licensing agreement, and this is one of the most commercially significant provisions to negotiate. Under Australian law there is no automatic rule vesting improvements in the licensor — if the agreement is silent, improvements created by the licensee may be owned by the licensee under the general principles of the Patents Act 1990 (Cth) and Copyright Act 1968 (Cth). A licensor wishing to retain control will typically include a clause in the agreement providing that all improvements and modifications to the Licensed IP vest in the licensor upon creation, with a licence back to the licensee to use those improvements during the term. Alternatively, the parties may agree on joint ownership or a right of first refusal. The agreement should also address improvements made collaboratively, where joint inventorship under s15 of the Patents Act 1990 (Cth) may give rise to joint ownership, and whether any improvements should be reported and disclosed promptly to the licensor.
Recording a licence with IP Australia is not mandatory but is strongly recommended for registered IP rights. For trade marks, recording a registered user arrangement under the Trade Marks Act 1995 (Cth) provides the licensee with a degree of protection and requires the trade mark use by the licensee is authorised use under s8, which is critical to maintaining the validity and distinctiveness of the mark. For patents, a licence can be noted on the Register of Patents under s187 of the Patents Act 1990 (Cth), which provides notice to third parties who might otherwise acquire an interest in the patent without notice of the licence. Registered designs under the Designs Act 2003 (Cth) can similarly be dealt with on the Designs Register. Recording a licence does not affect its validity between the parties, but it does give third parties notice and may be relevant to priority disputes. There is no equivalent register for copyright licences in Australia, as copyright arises automatically and is not registered.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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