Standard License Agreement: Definition & Sample

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What is a Standard License Agreement?

A standard license agreement is a contract between the licensor and licensee that grants the licensee permission to use an entity's intellectual property. It can grant licensee rights to use for a specific time period, or grant licensee unlimited access with certain limitations.

A standard license agreement usually includes provisions related to transferability of ownership, warranties, confidentiality, indemnification, and damages. The licensor may also include terms relating to copyright infringement in some cases. There are different types of licenses including exclusive, non-exclusive, and limited licenses among others. An exclusive license means no other party can make or distribute the product without consent from both parties while a non-exclusive license allows others besides the licensee to produce the products as long as they have permission from the original creator.

Common Sections in Standard License Agreements

Below is a list of common sections included in Standard License Agreements. These sections are linked to the below sample agreement for you to explore.

Standard License Agreement Sample

LICENSE AGREEMENT , dated as of April 27, 2007 (the “Commencement Date”) by and between STANDARD & POOR’S, a division of The McGraw-Hill Companies, Inc. (“S&P”), a New York corporation, having an office at 55 Water Street, New York, NY 10041-0003, and The Northwestern Mutual Life Insurance Company (“Licensee”), a Wisconsin corporation having an office at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

WHEREAS , Licensee wishes to obtain S&P’s authorization to use the S&P SmallCap 600 Index and the S&P Marks in connection with the Product pursuant to the terms and conditions hereinafter set forth.

NOW, THEREFORE , the parties hereto agree as follows:

(a) Subject to the terms and conditions of this Agreement, S&P hereby grants to Licensee a non-transferable, non-exclusive license (i) to use the S&P SmallCap 600 Index as a component of the Product to be marketed and/or promoted by Licensee and (ii) to use and refer to the S&P Marks in connection with the distribution, marketing and promotion of the Product (including in the name of the Product) and in connection with making such disclosure about the Product as Licensee deems necessary or desirable under any applicable law, rules, regulations or provisions of this Agreement, but, in each case, only to the extent necessary to indicate the source of the S&P SmallCap 600 Index. It is expressly agreed and understood by Licensee that no rights to use the S&P SmallCap 600 Index and the S&P Marks are granted hereunder other than those specifically described and expressly granted herein.

(b) S&P agrees that no person or entity (other than the Licensee) shall need to obtain a license from S&P with respect to the Product.

The term of this Agreement shall commence on the Commencement Date and shall continue in effect thereafter until it is terminated in accordance with its terms.

(a) Licensee shall pay to S&P the license fees (“License Fees”) specified and provide the data called for in Exhibit B, attached hereto and made a part hereof.

(a) At any time during the term of this Agreement, either party may give the other party ninety (90) days prior written notice of termination if the terminating party believes in good faith that material damage or harm is occurring to the reputation or goodwill of that party by reason of its continued performance hereunder, and such notice shall be effective on the date specified therein of such termination, unless the other party shall correct the condition causing such damage or harm within the notice period.

(b) In the case of breach of any of the material terms or conditions of this Agreement by either party, the other party may terminate this Agreement by giving ninety (90) days prior written notice of its intent to terminate, and such notice shall be effective on the date specified therein for such termination unless the breaching party shall correct such breach within the notice period.

(c) S&P shall have the right, in its sole discretion, to cease compilation and publication of the S&P SmallCap 600 Index and, in such event, to terminate this Agreement if S&P does not offer a replacement or substitute index. In the event that S&P intends to discontinue the S&P SmallCap 600 Index, S&P shall give Licensee at least one (1) year’s written notice prior to such discontinuance, which notice shall specify whether a replacement or substitute index will be made available.

Licensee shall have the option hereunder within sixty (60) days after receiving such written notice from S&P to notify S&P in writing of its intent to use the replacement or substitute index, if any, under the terms of this Agreement. In the event that Licensee does not exercise such option or no substitute or replacement index is made available, this Agreement shall be terminated as of the date specified in the S&P notice and the License Fees to the date of such termination shall be computed as provided in Subsection 4(f).

(d) Licensee may terminate this Agreement upon ninety (90) days prior written notice to S&P if (i) Licensee is informed of the final adoption of any legislation or regulation or the issuance of any interpretation that in Licensee’s reasonable judgment materially impairs Licensee’s ability to market and/or promote the Product; (ii) any material litigation or regulatory proceeding regarding the Product is threatened or commenced; or (iii) Licensee elects to terminate the public offering or other distribution of the Product, as may be applicable. In such event the License Fees to the date of such termination shall be computed as provided in Subsection 4(f).

(e) S&P may terminate this Agreement upon ninety (90) days (or upon such lesser period of time if required pursuant to a court order) prior written notice to Licensee if (i) S&P is informed of the final adoption of any legislation or regulation or the issuance of any interpretation that in S&P’s reasonable judgment materially impairs S&P’s ability to license and provide the S&P SmallCap 600 Index and S&P Marks under this Agreement in connection with such Product; or (ii) any litigation or proceeding is threatened or commenced and S&P reasonably believes that such litigation or proceeding would have a material and adverse effect upon the S&P Marks and/or the S&P SmallCap 600 Index or upon the ability of S&P to perform under this Agreement. In such event the License Fees to the date of such termination shall be computed as provided in Subsection 4(f).

(f) In the event of termination of this Agreement as provided in Subsections 4(a), (b), (c), (d) or (e), the License Fees to the date of such termination shall be computed by prorating the amount of the applicable License Fees shown in Exhibit B on the basis of the number of elapsed days in the current term.

(g) Upon termination of this Agreement, Licensee shall cease to use the S&P SmallCap 600 Index and the S&P Marks in connection with the Product; provided that Licensee may continue to utilize any previously printed materials which contain the S&P Marks for a period of ninety (90) days following such termination.

(a) It is the policy of S&P to prohibit its employees who are directly responsible for changes in the components of the S&P SmallCap 600 Index from purchasing or beneficially owning any interest in the Product and S&P believes that its employees comply with such policy. Licensee shall have no responsibility for ensuring that such S&P employees comply with such S&P policy and shall have no duty to inquire whether any investors or sellers of the Product are such S&P employees. S&P shall have no liability to the Licensee with respect to its employees’ adherence or failure to adhere to such policy.

(b) S&P shall not and is in no way obliged to engage in any marketing or promotional activities in connection with the Product or in making any representation or statement to investors or prospective investors in connection with the promotion by Licensee of the Product.

(c) S&P agrees to provide reasonable support for Licensee’s development and educational efforts with respect to the Product as follows: (i) S&P shall provide Licensee, upon request

but subject to any agreements of confidentiality with respect thereto, copies of the results of any marketing research conducted by or on behalf of S&P with respect to the S&P SmallCap 600 Index; and (ii) S&P shall respond in a timely fashion to any reasonable requests for information by Licensee regarding the S&P SmallCap 600 Index.

(d) S&P or its agent shall calculate and disseminate the S&P SmallCap 600 Index at least once each fifteen (15) seconds in accordance with its current procedures, which procedures may be modified by S&P.

Licensee shall use its best efforts to protect the goodwill and reputation of S&P and of the S&P Marks in connection with its use of the S&P Marks under this Agreement. Licensee shall submit to S&P for its review and approval those sections of all informational materials pertaining to and to be used in connection with the Product, including, where applicable, all prospectuses, plans, registration statements, application forms, contracts, videos, internet sites, electronic commerce, advertisements, brochures and promotional and any other similar informational materials (including documents required to be filed with governmental or regulatory agencies) that in any way use or refer to S&P, the S&P SmallCap 600 Index, or the S&P Marks (the “Informational Materials”). S&P’s approval shall be required with respect to the use of and description of S&P, the S&P Marks and

the S&P SmallCap 600 Index and shall not be unreasonably withheld or delayed by S&P. Specifically, S&P shall notify Licensee of its approval or disapproval of any Informational Materials within forty-eight (48) hours (excluding Saturday, Sunday and New York Stock Exchange Holidays) following receipt thereof from Licensee. Any disapproval shall indicate S&P’s reasons therefor. Any failure by S&P to respond within such forty-eight (48) hour period shall be deemed to constitute a waiver of S&P’s right to review such Informational Materials.

Informational Materials shall be addressed to S&P, c/o Sarah Contreras Connors, Director, Index Licensing/Marketing, Equity Index Services, at the address specified in Subsection 12(d); by email to sarah_contreras@sandp.com / dawn_m_johnson@sandp.com; or via facsimile (to 212-438-3523 or 212-438-3543)if they are less than 20 pages and legible after transmission. Once Informational Materials have been approved by S&P, subsequent Informational Materials which do not alter the use or description of S&P, the S&P Marks or the S&P 500 Index need not be submitted for review and approval by S&P.

(a) During the term of this Agreement, S&P shall use its best efforts to maintain in full force and effect federal registrations for “Standard & Poor’s ® ” and “S&P ® ”. S&P shall at S&P’s own expense and sole discretion exercise S&P’s common law and statutory rights against infringement of the S&P Marks, copyrights and other proprietary rights.

(b) Licensee shall cooperate with S&P in the maintenance of such rights and registrations and shall take such actions and execute such instruments as S&P may from time to time reasonably request, and shall use the following notice when referring to the S&P SmallCap 600 Index or the S&P Marks in any Informational Material:

“Standard & Poor’s ® ”, “S&P ® ”, “S&P SmallCap 600” and “Standard & Poor’s SmallCap 600” are trademarks of The

McGraw-Hill Companies, Inc. and have been licensed for use by The Northwestern Mutual Life Insurance Company. The Product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Product.

or such similar language as may be approved in advance by S&P, it being understood that such notice need only refer to the specific S&P Marks referred to in the Informational Material.

(a) Licensee acknowledges that the S&P SmallCap 600 Index is selected, coordinated, arranged and prepared by S&P through the application of methods and standards of judgment used and developed through the expenditure of considerable work, time and money by S&P. Licensee also acknowledges that the S&P SmallCap 600 Index and the S&P Marks are the exclusive property of S&P, that S&P has and retains all proprietary rights therein (including, but not limited to trademarks and copyrights) and that the S&P SmallCap 600 Index and its compilation and composition and changes therein are in the control and discretion of S&P.

(b) S&P reserves all rights with respect to the S&P SmallCap 600 Index and the S&P Marks except those expressly licensed to Licensee hereunder.

(c) Each party shall treat as confidential and shall not disclose or transmit to any third party any documentation or other written materials that are marked as “Confidential and Proprietary” by the providing party (“Confidential Information”). Confidential Information shall not include (i) any information that is available to the public or to the receiving party hereunder from sources other than the providing party (provided that such source is not subject to a confidentiality agreement with regard to such information) or (ii) any information that is

independently developed by the receiving party without use of or reference to information from the providing party. Notwithstanding the foregoing, either party may reveal Confidential Information to any regulatory agency or court of competent jurisdiction if such information to be disclosed is (a) approved in writing by the other party for disclosure or (b) required by law, regulatory agency or court order to be disclosed by a party, provided, if permitted by law, that prior written notice of such required disclosure is given to the other party and provided further that the providing party shall cooperate with the other party to limit the extent of such disclosure. The provisions of this Subsection 8(c) shall survive any termination of this Agreement for a period of five (5) years from disclosure by either party to the other of the last item of such Confidential Information.

(a) S&P represents and warrants that S&P has the right to grant the rights granted to Licensee herein and that the license granted herein shall not infringe any trademark, copyright or other proprietary right of any person not a party to this Agreement.

(b) S&P further warrants and represents to Licensee that the S&P Marks and the S&P SmallCap 600 Index are the exclusive property of S&P, that S&P has and retains all proprietary rights therein (including, but not limited to trademarks and copyrights), that the S&P SmallCap 600 Index and its compilation and composition and changes therein are in the control and discretion of S&P, and that the S&P SmallCap 600 Index and S&P Marks do not infringe the rights of any third party.

(c) Licensee agrees expressly to be bound itself by and furthermore to include all of the following disclaimers and limitations in each prospectus or each Statement of Additional Information (“SAI”) relating to the Product, provided the SAI is incorporated by reference into the prospectus and the prospectus contains disclosure regarding the S&P SmallCap 600 Index that

conforms to the notice in Subsection 7(b), including a cross reference to the SAI disclosure. Licensee shall furnish a copy of the prospectus and, if applicable, the SAI, to S&P:

The Product is not sponsored, endorsed, sold or promoted by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”). S&P makes no representation or warranty, express or implied, to the owners of the Product or any member of the public regarding the advisability of investing in securities generally or in the Product particularly or the ability of the S&P SmallCap 600 Index to track general stock market performance. S&P’s only relationship to the Licensee is the licensing of certain trademarks and trade names of S&P and of the S&P SmallCap 600 Index which is determined, composed and calculated by S&P without regard to the Licensee or the Product. S&P has no obligation to take the needs of the Licensee or the owners of the Product into consideration in determining, composing or calculating the S&P SmallCap 600 Index. S&P is not responsible for and has not participated in the determination of the prices and amount of the Product or the timing of the issuance or sale of the Product or in the determination or calculation of the equation by which the Product is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Product.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P SMALLCAP 600 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P SMALL 600 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

Any changes in the foregoing disclaimers and limitations must be approved in advance in writing by an authorized officer of S&P.

(d) Each party represents and warrants to the other that it has the authority to enter into this Agreement according to its terms and that its performance does not violate any laws, regulations or agreements applicable to it.

(e) Licensee represents and warrants to S&P that the Product shall at all times comply with the description in Exhibit A.

(f) Licensee represents and warrants to S&P that the Product shall not violate any applicable law, including but not limited to banking, commodities and securities laws.

(g) Neither party shall have any liability for lost profits or indirect, punitive, special, or consequential damages arising out of this Agreement, even if notified of the possibility of such damages. Without diminishing the disclaimers and limitations set forth in Subsection 9(c), in no event shall the cumulative liability of S&P to Licensee exceed the average annual License Fees actually paid to S&P hereunder.

(h) Use of any marks by Licensee in connection with its Product (including in the name of such Product) which are not the S&P Marks is at Licensee’s sole risk.

(i) The provisions of this Section 9 shall survive any termination of this Agreement.

(a) Licensee shall indemnify and hold harmless S&P, its affiliates and their officers, directors, employees and agents against any and all judgments, damages, costs or losses of any kind (including reasonable attorneys’ and experts’ fees) as a result of any claim, action, or proceeding that arises out of or relates to (a) this Agreement, except insofar as it relates to a breach by S&P of its representations or warranties hereunder, or (b) its use of the Product; provided, however, that S&P notifies Licensee promptly of any such claim, action or proceeding. Licensee shall periodically reimburse S&P for its reasonable expenses incurred under this Subsection 10(a). S&P shall have the right, at its own expense, to participate in the defense of any claim, action or proceeding against which it is indemnified hereunder; provided, however, it shall have no right to control the defense, consent to judgment, or agree to settle any such claim, action or proceeding without the written consent of Licensee without waiving the indemnity hereunder. Licensee, in the defense of any such claim, action or proceeding except with the written consent of S&P, shall not consent to entry of any judgment or enter into any settlement which either (a) does not include, as an unconditional term, the grant by the claimant to S&P of a release of all liabilities in respect of such claims or (b) otherwise adversely affects the rights of S&P. This provision shall survive the termination or expiration of this Agreement.

right, at its own expense, to participate in the defense of any claim, action or proceeding against which it is indemnified hereunder; provided, however, it shall have no right to control the defense, consent to judgment, or agree to settle any such claim, action or proceeding without the written consent of S&P without waiving the indemnity hereunder. S&P, in the defense of any such claim, action or proceeding, except with the written consent of Licensee, shall not consent to entry of any judgment or enter into any settlement which either (a) does not include, as an unconditional term, the grant by the claimant to Licensee of a release of all liabilities in respect of such claims or (b) otherwise adversely affects the rights of Licensee. This provision shall survive the termination or expiration of this Agreement.

Neither S&P nor Licensee shall bear responsibility or liability for any losses arising out of any delay in or interruptions of their respective performance of their obligations under this Agreement due to any act of God, act of governmental authority, act of the public enemy or due to war, the outbreak or escalation of hostilities, riot, fire, flood, civil commotion, insurrection, labor difficulty (including, without limitation, any strike, or other work stoppage or slow down), severe or adverse weather conditions, communications line failure, or other similar cause beyond the reasonable control of the party so affected.