What Does “Exclusive License” Mean in a Contract?
A license granting rights to only one licensee, preventing the licensor from granting similar rights to others.
Detailed Explanation
Exclusive licenses give the licensee unique rights—the licensor cannot grant the same rights to competitors. Exclusivity can be limited by territory, field of use, or time period.
Exclusivity is valuable and typically costs more. True exclusivity may even prevent the licensor from using their own IP in the covered field. Semi-exclusive arrangements allow the licensor to retain some rights.
Example in a Contract
“Licensor grants Licensee an exclusive license to manufacture, market, and sell products incorporating the Technology within the Territory. Licensor shall not grant similar rights to any third party within the Territory.”
Why It Matters
Exclusive licenses prevent competition from others using the same IP. If exclusivity is important to your business, ensure it's clearly stated and covers the relevant scope. Also verify it's truly exclusive—sometimes licensors retain rights for themselves.
Related Terms
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