License grant
A license grant is the clause that gives one party permission to use another’s intellectual property within set limits, while ownership stays put.
What it means
A license grant lets someone use intellectual property they do not own, such as software, content, a brand or a patent. Ownership stays with the licensor; the licensee only gets permission. The clause defines the scope of that permission, and anything outside it is generally not allowed.
Most license grants are built from the same pieces: exclusive or non-exclusive, territory, duration, whether it can be revoked, whether it can be transferred or sublicensed, and what the licensee may actually do, such as use, copy, modify or distribute. A photographer who gives a café a non-exclusive, one-year, web-only license to an image can still sell that image to others, and the café cannot put it on printed menus.
Licenses are common in freelance work when a creator wants to keep ownership, in software and SaaS agreements, and in deals where a client gets a license to a contractor’s pre-existing tools. The scope words do most of the work, so small differences like “perpetual” versus “during the term,” or “internal business purposes” versus “any purpose,” can decide what each side can do years later.
What to watch for
- Check whether the license is exclusive, which can block even the owner from using or licensing the work to others, or non-exclusive.
- Confirm the permitted uses, media, territory and duration match what you actually need or intend to allow.
- Look at whether the license can be revoked, and what happens to it if the contract ends or payments stop.
- See whether the licensee can sublicense, transfer, or let affiliates and contractors use the licensed material.
- Check how fees or royalties are calculated and whether the license depends on paying them.
Example clause
Licensor grants Licensee a non-exclusive, non-transferable, revocable license during the Term to use the Software in the United States solely for Licensee’s internal business purposes. Licensee may not sublicense, modify or distribute the Software, and all rights not expressly granted are reserved by Licensor.
You can use the software only for your own business, only in the US and only while the contract lasts, and you cannot share or change it.