Sublicenses

A sublicense is a license granted by a licensee of intellectual property or other assets to a third party, under the terms of the original license from the licensor. In most cases, a sublicense is only effective to the extent permitted by the primary license and applicable law, and it does not convey ownership of the underlying asset.

Whether a sublicense may be granted depends on the original license agreement. Many licenses require the licensor's prior written consent for any sublicensing, or prohibit sublicensing altogether. Some agreements allow sublicensing to affiliates or as part of a distribution network, sometimes with conditions such as notice to the licensor, quality control, and payment of royalties.

Sublicensing typically requires the sublicensee to comply with the terms of the primary license, including any field-of-use, territory, performance standards, and reporting. The licensor often retains oversight, with rights such as audits, termination for breach, or step-in rights if the sublicensee fails to perform. The sublicense itself creates a chain of rights but does not transfer ownership of the IP.

Common contexts include software distribution, patent licensing, copyright- or trademark-related licensing in publishing or franchising, and broadcasting rights where a distributor may sublicense to service providers or affiliates.

Potential issues include unauthorized sublicensing, misalignment of sublicensing terms with the primary license, non-payment of royalties, or quality-control failures. Clear written terms are essential to establish consent, scope, royalties, duration, and termination rights.

---