nonexclusive

Nonexclusive describes a contractual arrangement in which the rights granted or obligations owed are not limited to a single party. In a nonexclusive license, the licensor may grant the same rights to multiple licensees and retain the right to further license, manufacture, or distribute the product themselves. The licensee does not gain exclusive control over the rights and must operate under the terms alongside others.

Common in intellectual property licensing, distribution agreements, and supplier relationships. For IP, a nonexclusive license allows use of a patented invention, trademark, or software under defined terms, without preventing others from obtaining similar licenses. Territorial or field-of-use restrictions may limit where or how the license applies, but exclusivity is not provided.

Compared with an exclusive license, a nonexclusive grant allows the licensor to monetize IP more broadly and reduces negotiating barriers for potential licensees; however, it also means reduced protection against competition and potentially lower transfer value or royalty rates for the licensor. Licensees in nonexclusive arrangements bear the risk of competition from others and may face market saturation.

Drafting considerations include defining the scope of rights, field of use, territory, duration, royalty structure, sublicensing rights, performance obligations, termination, and post-termination rights. Clear terms help avoid disputes over perceived exclusivity or scope.

Other uses include nonexclusive distribution, employment or agency relationships, and procurement where multiple suppliers provide goods or services. The term is most often contrasted with exclusive agreements, which grant one party exclusive rights within a defined scope.