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Let's talk about irrevocable intellectual property (IP) licenses. We use the license grant provision to shape what permissions the licensor grants to its licensees. One of the concepts included in many licenses is whether the license is irrevocable.

What It Means When An Intellectual Property License Irrevocable

Let's talk about irrevocable intellectual property (IP) licenses. 
 
We use the license grant provision to shape what permissions the licensor grants to its licensees. One of the concepts included in many licenses is whether the license is irrevocable.

If the license grant identifies it as being irrevocable, the licensor cannot terminate even if the licensee breaches the terms. The licensor's only option is to sue for damages.

There are other important concepts to think about when drafting an irrevocable license:

1. Scope of the licensor’s own rights

Licensors can only grant rights they have. So if the licensor received a revocable license from a third party, it cannot grant an irrevocable license to that technology.

2. Infringement

Most indemnification provisions give the licensor the right to terminate the license if there is an infringement claim.  The licensor then is obligated to replace the technology with an equivalent one or refund the amounts paid. These licensors should exclude that option from any irrevocable grant.

3. Non-payment

If the licensee pays the license fee over time, the licensor may want to make the license irrevocable only after it receives full payment.

What other issues should we think about with irrevocable licenses?
 

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