What Does “Sublicense” Mean in a Contract?
A license granted by a licensee to a third party, deriving from and subject to the original license.
Detailed Explanation
Sublicensing allows licensees to extend rights to others. This is important when you need to let contractors, partners, or customers use licensed IP. Most licenses prohibit sublicensing without permission.
Sublicenses are limited by the parent license—you can't grant more rights than you have. If your license terminates, sublicenses typically terminate too.
Example in a Contract
“Licensee may not sublicense any rights granted hereunder without Licensor's prior written consent, except that Licensee may sublicense to wholly-owned subsidiaries without consent.”
Why It Matters
If your business model requires sharing licensed IP with others (contractors, partners, end users), ensure sublicense rights are included. Without them, you may inadvertently breach by letting others use the IP.
Related Terms
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