Design Licence Agreement (UK)
DESIGN LICENCE AGREEMENT
This Design Licence Agreement (the "Agreement") is entered into on [Agreement Date] between:
(1) [Licensor Name], of [Licensor Address] (the "Licensor"); and
(2) [Licensee Name], of [Licensee Address] (the "Licensee").
THE LICENSED DESIGN
1.1 The Licensor is the owner of the following design rights (the "Licensed Design"): [Design Description]
1.2 The design rights being licensed include: [Design Rights Type]. Registered design number (where applicable): [Registered Design Number].
1.3 The Licensed Design is protected under the Copyright, Designs and Patents Act 1988 and/or the Registered Designs Act 1949. The Licensor warrants that they are the owner of the Licensed Design and have the right to grant this licence.
GRANT OF LICENCE
2.1 The Licensor hereby grants the Licensee a [Exclusivity] licence to use the Licensed Design within the territory of [Territory] for the following permitted purpose(s): [Permitted Use]
2.2 The Licensee shall not sub-licence, assign, or otherwise transfer any rights under this Agreement without the prior written consent of the Licensor.
2.3 This licence commences on [Start Date] and shall continue for a period of [Licence Term].
2.4 All rights not expressly granted in this Agreement are reserved by the Licensor.
ROYALTIES AND PAYMENT
3.1 In consideration of the licence granted, the Licensee shall pay the Licensor on a [Royalty Type] basis at a rate of [Royalty Rate] (plus VAT where applicable).
3.2 Royalty statements and payments shall be rendered quarterly, within 30 days of the end of each calendar quarter, accompanied by a statement showing the net sales figures and calculation of royalties due.
3.3 The Licensor shall have the right, on reasonable notice, to audit the Licensee's records to verify royalty calculations.
QUALITY CONTROL
4.1 The Licensee shall not use the Licensed Design in any way that, in the Licensor's reasonable opinion, is likely to damage the reputation of the Licensor or the value of the Licensed Design.
4.2 The Licensee shall provide the Licensor with samples of any products incorporating the Licensed Design for approval prior to commercial launch. Approval shall not be unreasonably withheld.
MORAL RIGHTS
5.1 The Licensor hereby asserts their moral right to be identified as the author of the Licensed Design in accordance with sections 77–78 of the Copyright, Designs and Patents Act 1988. The Licensee shall include an appropriate attribution credit on products incorporating the Licensed Design unless the Licensor agrees otherwise in writing.
TERMINATION
6.1 Either Party may terminate this Agreement on 90 days' written notice.
6.2 The Licensor may terminate immediately if the Licensee fails to pay royalties when due, uses the Licensed Design outside the permitted scope, challenges the validity of the Licensor's design rights, or becomes insolvent.
6.3 On termination, the Licensee shall immediately cease all use of the Licensed Design and shall destroy or return all materials incorporating the design. All accrued royalties shall remain payable.
GENERAL
7.1 This Agreement is governed by the laws of England and Wales. The Parties submit to the exclusive jurisdiction of the courts of England and Wales.
7.2 The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement.
SIGNED by the duly authorised representatives of the Parties:
LICENSOR
Signed: ____________________________
For and on behalf of: [Licensor Name]
Date: ____________________________
LICENSEE
Signed: ____________________________
For and on behalf of: [Licensee Name]
Date: ____________________________
Licensor
________________
Signature
Date: ________________
Licensee
________________
Signature
Date: ________________
What Is a Design Licence Agreement (UK)?
A Design Licence Agreement in the United Kingdom grants permission to use the owner's rights or brand and sets the scope, territory, fees, and duration of that licence, as regulated by the Copyright, Designs and Patents Act 1988.
Design rights are commercially valuable assets. A graphic designer who creates a distinctive logo, pattern, or illustration owns the copyright in that work. A product designer who develops a novel industrial design may have both unregistered UK design right and, if registered, a registered design right. A fashion designer who creates a distinctive textile pattern owns copyright in that pattern. In all these cases, the designer may wish to licence the right to use their design to one or more commercial partners — for example, a manufacturer who wants to produce goods featuring the pattern, a retailer who wants to use the logo, or a publisher who wants to reproduce the illustration — while retaining ownership of the underlying design rights.
A well-drafted Design Licence Agreement defines precisely: which design rights are being licensed; the scope of permitted use (what products or services may the design be used on?); the territorial scope (which countries?); the exclusivity of the licence; the duration of the licence; the royalties or licence fees payable; quality control obligations; the licensor's right to audit the licensee's books to verify royalty payments; and the circumstances in which the licence can be terminated.
Our UK Design Licence Agreement template is drafted in accordance with English law and covers all the essential elements of a design licence, from the description of the licensed design rights through to royalty accounting, quality standards, and termination provisions.
The legal framework governing the Design Licence Agreement (UK) in United Kingdom draws on several key statutes and regulatory bodies. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Parties executing a Design Licence Agreement (UK) in United Kingdom should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Copyright, Designs and Patents Act 1988 sets the foundational requirements.
When Do You Need a Design Licence Agreement (UK)?
A Design Licence Agreement is needed whenever a design owner wishes to authorise another party to use their design commercially. This occurs in many contexts across the creative and manufacturing industries.
For graphic designers and illustrators, a Design Licence Agreement is needed when a client or commercial partner wants to use their work on products, packaging, websites, or marketing materials. Rather than assigning the copyright outright, a licence allows the designer to maintain ownership of their work while earning royalties from its commercial use.
For industrial and product designers, a Design Licence Agreement is needed when a manufacturer wants to produce goods based on a designer's design. The designer may grant an exclusive licence to a single manufacturer or non-exclusive licences to multiple manufacturers, depending on their commercial strategy.
For fashion designers, a Design Licence Agreement is needed when a fabric manufacturer, retailer, or other brand wants to reproduce a distinctive print, pattern, or design element under a collaboration or licensing arrangement.
For technology and software companies, a Design Licence Agreement may be needed for user interface (UI) designs, icon sets, or brand identity elements.
A Design Licence Agreement is also needed when renegotiating or formalising an existing informal licence arrangement — for example, when a designer has been allowing a business to use their work informally and now wishes to put the relationship on a proper commercial footing, including royalty obligations.
Finally, when buying or selling a business that includes licensed designs as part of its IP portfolio, reviewing and potentially renegotiating Design Licence Agreements is an important part of the due diligence and transaction process.
Parties in United Kingdom should prepare a Design Licence Agreement (UK) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Design Licence Agreement (UK)
A thorough UK Design Licence Agreement should include the following key elements.
Party details: The full legal names and addresses of the licensor (design owner) and the licensee.
Description of licensed design: A precise description of the design(s) being licensed, including reference numbers (for registered designs), images, and the applicable design right (copyright, UK unregistered design right, registered design, or all of the above).
Scope of licence: The specific uses to which the licensee is permitted to put the design — for example, use on particular products, in particular formats, on particular platforms, or for particular purposes. Any exclusions should be clearly stated.
Exclusivity: Whether the licence is exclusive, sole, or non-exclusive.
Territory: The geographic territory within which the licensee is permitted to use the design.
Duration: The term of the licence, including any renewal provisions.
Royalties and licence fees: The financial terms, including royalty rates, minimum annual royalties, upfront fees, the definition of net sales, audit rights, and the payment and reporting schedule.
Quality control: The licensor's right to approve samples and set quality standards, and the licensee's obligations to maintain those standards.
Morale rights: Acknowledgment of the designer's moral rights under the CDPA 1988, including the right to be identified as the author (if not waived).
Infringement: The procedure for notifying and dealing with third-party infringement of the licensed design.
Termination: The circumstances in which the licence may be terminated and the consequences of termination.
Governing law: English law and the jurisdiction of the courts of England and Wales.
Additional compliance elements for a Design Licence Agreement (UK) used in United Kingdom include: Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Forms-legal.com provides this template as a starting point for United Kingdom-compliant documentation.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Design Licence Agreement (UK) (United Kingdom) [Legal document template]. Forms Legal. https://forms-legal.com/uk/business/intellectual-property/design-licence-agreement-uk
"Design Licence Agreement (UK) (United Kingdom)." Forms Legal, 2026, https://forms-legal.com/uk/business/intellectual-property/design-licence-agreement-uk.
@misc{formslegal-design-licence-agreement-uk,
author = {{Forms Legal}},
title = {Design Licence Agreement (UK) (United Kingdom)},
year = {2026},
howpublished = {\url{https://forms-legal.com/uk/business/intellectual-property/design-licence-agreement-uk}},
note = {Free legal document template. Based on Copyright, Designs and Patents Act 1988}
}
Frequently Asked Questions
UK law protects designs through several overlapping legal regimes. Registered designs are protected under the Registered Designs Act 1949 (as amended) and give the holder a monopoly right over the appearance of a product for up to 25 years, renewable in 5-year periods. To be registered, a design must be new and have individual character. Registration is handled by the Intellectual Property Office (IPO). Unregistered designs are protected automatically under the Copyright, Designs and Patents Act 1988 (CDPA 1988). UK unregistered design right arises automatically and protects the three-dimensional shape or configuration of an original design for up to 15 years (or 10 years from first marketing). Artistic copyright under the CDPA 1988 protects two-dimensional graphic designs, logos, surface patterns, and illustrations as original artistic works, typically for the life of the creator plus 70 years. Since the UK's exit from the European Union, UK unregistered design right and Supplementary Unregistered Design (SUD) rights have replaced the former EU unregistered design right for UK-based designers. A Design Licence Agreement should specify which rights are being licensed — registered designs, unregistered design right, copyright, or all of them — to confirm the licence is detailed and legally sound.
An exclusive design licence gives the licensee the sole right to use the design within the defined scope of the licence. Under an exclusive licence, even the licensor (the design owner) cannot use the design within that scope. Under section 225 of the Copyright, Designs and Patents Act 1988 (for design right licences) and equivalent provisions for registered designs, an exclusive licensee has the right to bring infringement proceedings in their own name, which provides a powerful enforcement tool. A non-exclusive design licence allows the licensor to grant the same licence to multiple licensees simultaneously. Non-exclusive licensees generally cannot bring infringement proceedings in their own name without joining the licensor. A sole licence is a form of exclusive licence under which the licensor agrees not to grant the licence to any other party, but retains the right to use the design themselves. The choice between exclusive, sole, and non-exclusive licences has significant commercial implications — exclusive and sole licences typically command higher royalty rates or upfront licence fees in return for the greater exclusivity granted to the licensee.
Design licence agreements in the UK commonly use one or more of the following royalty structures. A running royalty is calculated as a percentage of the net sales revenue generated by products incorporating the licensed design. The royalty rate for design licences varies widely depending on the industry, the strength and value of the design, the scope of the licence, and the exclusivity granted — typical rates range from 2% to 15% of net sales. A lump sum licence fee is a fixed upfront payment made by the licensee in exchange for the licence, with no ongoing royalties. A minimum annual royalty guarantees the licensor a minimum income regardless of the licensee's actual sales — if the running royalties earned in a year fall below the minimum, the licensee must pay the shortfall. An advance royalty is an upfront payment against future running royalties — the advance is recouped from the first royalties earned before any further royalties are paid. The Design Licence Agreement should also define 'net sales' clearly (typically gross sales revenue less returns, discounts, and applicable taxes) to avoid disputes about the royalty calculation base.
Quality control provisions are a critical feature of any design licence agreement. The licensor has a legitimate commercial interest in ensuring that the licensed design is used in a way that maintains the integrity and value of their brand and creative work. If the licensee produces goods incorporating the design that are of poor quality or are used in an inappropriate context, this can damage the licensor's reputation and reduce the value of the design. Quality control provisions in a Design Licence Agreement typically require the licensee to submit samples of products incorporating the design to the licensor for approval before they are commercially launched; to maintain agreed quality standards throughout the term of the licence; to use the design only in the approved manner and context; and to notify the licensor promptly of any alleged infringement of the licensed design by third parties. From a legal perspective, quality control provisions in trade mark licences are particularly important because a trade mark that is not properly controlled can be vulnerable to revocation on the grounds of deceptive use. While design rights are not subject to the same specific control requirements as trade marks, the principle of maintaining quality standards through contractual provisions is equally important for protecting the commercial value of the design.
A Design Licence Agreement can be terminated in several ways. First, the agreement may include a fixed term, at the expiry of which the licence automatically ends unless renewed. Second, either party may have the right to terminate on notice (for example, 90 days' written notice) without cause, which provides flexibility. Third, either party may terminate immediately for cause — for example, if the licensee fails to pay royalties when due, uses the design outside the permitted scope, breaches quality control obligations, challenges the validity of the licensed design rights, or becomes insolvent. Insolvency is a particularly significant trigger: if the licensee becomes insolvent and enters administration or liquidation, the administrator or liquidator may seek to assign or disclaim the licence agreement. The Design Licence Agreement should include provisions addressing the treatment of the licence in insolvency, including whether the licensee's insolvency gives the licensor the right to terminate immediately. Upon termination, the licensee must immediately cease all use of the licensed design and destroy or return all materials incorporating the design. Any outstanding royalties accrued before termination remain payable.
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
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Licensing Agreement (UK)
License intellectual property rights in England and Wales with this detailed Licensing Agreement. Drafted in accordance with the Copyright, Designs and Patents Act 1988, the Trade Marks Act 1994, the Patents Act 1977, and general English contract law. Covers the grant of exclusive, sole, or non-exclusive licences for copyright, trade marks, patents, or know-how; territory; licence fee or royalties; quality control; sub-licensing; IP ownership and protection; confidentiality; warranties; and termination. Suitable for software, brand, patent, and content licensing arrangements.
IP Assignment Agreement (UK) (Contracts)
Transfer ownership of intellectual property in England and Wales with a legally compliant IP Assignment Agreement. Whether you are transferring copyright in a software application, assigning patent rights in an invention, or conveying trade mark ownership to a buyer or new business entity, a properly drafted IP assignment agreement complies with the formal requirements of the Copyright, Designs and Patents Act 1988, the Patents Act 1977, and the Trade Marks Act 1994. Our template includes moral rights waiver provisions, full title guarantee, further assurance obligations, and optional licence-back arrangements.
Trade Mark Licence Agreement (UK)
Grant or obtain permission to use a registered trade mark in England and Wales with a legally compliant Trade Mark Licence Agreement. Whether you are a brand owner licensing your mark to a distributor, manufacturer, or retail partner, or a business seeking to use an established brand, a properly drafted trade mark licence agreement protects the brand's distinctiveness, establishes quality control obligations required by the Trade Marks Act 1994, defines the royalty structure, and sets clear boundaries on how the mark may be used. Our template complies with sections 28 to 31 of the Trade Marks Act 1994 and includes provisions for UKIPO registration.
Music Licence Agreement (UK)
Grant or obtain permission to use musical works and sound recordings in England and Wales with a Music Licence Agreement compliant with the Copyright, Designs and Patents Act 1988 (CDPA 1988). Covers synchronisation rights, mechanical rights, public performance rights, and master recording rights. Includes PRS for Music and PPL collecting society provisions, moral rights assertion (CDPA 1988 ss.77-80), exclusive and non-exclusive licence options, territory and term provisions, Late Payment of Commercial Debts Act 1998 interest, and termination rights.
Non-Disclosure Agreement (NDA) (UK)
Protect your confidential business information in England and Wales with a legally sound Non-Disclosure Agreement. Whether you are sharing trade secrets with a prospective partner, disclosing proprietary technology to a developer, or presenting financial projections to a potential investor, a properly drafted UK NDA keeps your sensitive information under strict legal protection. Our template is drafted in accordance with English common law and incorporates the key provisions required for enforceability in England and Wales.