License agreement checklist: what to have ready

Tellbrief · November 1, 2026

For education only. Not legal advice. Tellbrief is not a law firm.

A license usually lets one side use something the other owns: a brand, characters, software, a recipe, data. The draft decides what, where, for how long and for how much.

Know which side you’re on

Write down whether you’re giving the license or taking it, and what exactly it covers. “Our characters on plush toys in the U.S. and Canada” is more useful to a lawyer than “our brand”.

Records to have ready

• The draft, term sheet or email that sets out the deal.
• What shows who owns the thing being licensed: trademark or copyright registrations, patents, and agreements with whoever made it.
• Any earlier license for the same thing, especially one that says exclusive.
• Sales numbers, if the payment is a share of sales.
• Emails or messages about what each side promised.

If someone outside the company made what’s being licensed, see who owns the IP your business built first.

Exclusive or not

Federal copyright law treats an exclusive license differently from a nonexclusive one. It defines a “transfer of copyright ownership” as:

“an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a nonexclusive license.”¹17 U.S.C. § 101

Note whether the draft says exclusive, and for what: a territory, a product line, a sales channel. Ask your lawyer what that word means for your deal.

If your brand is part of it

Federal trademark law defines a “related company” as one “whose use of a mark is controlled by the owner of the mark with respect to the nature and quality of the goods or services on or in connection with which the mark is used.”² If someone else will put your name on a product, write down how you plan to check what they make: samples, approvals, visits. A lawyer may ask. The trademark checklist covers what to gather about the name itself.

Write down the money

• Any upfront fee.
• The royalty rate, and what it’s a share of: list price, net sales or profit.
• Any minimum payment each year.
• How sales are reported, and whether either side can check the numbers.
• When payments are due.

Mark these parts of the draft

You don’t need to judge them. Find where the draft covers each one and flag it, so the call can go straight there.

• What exactly is licensed, and what isn’t.
• Whether it’s exclusive, and where.
• How long it lasts, how it renews and how either side can end it.
• Who owns improvements or new versions.
• Approvals and quality checks.
• Whether the other side can license it on to someone else.
• What happens to leftover stock and materials at the end.
• Who pays if a third party says the rights are theirs.

A made-up example

We make a children’s card game. A toy company wants to put our characters on plush toys for three years in the U.S. and Canada and pay us 6% of what they sell. Their draft says the license is exclusive for “all products”. An illustrator we hired drew the characters, and we have her invoice but no signed agreement. What should we change before we sign?

To write yours, fill in the brackets:

We [give / take] a license for [what], to [who], for [products or uses] in [places], for [how long]. The payment is [fee, royalty rate, minimum]. The draft says it’s [exclusive / not exclusive / doesn’t say]. [Who made the thing being licensed, and what they signed]. Our main question: [the one that matters most].

Questions a lawyer may ask you

Have a short answer ready for each. “I don’t know yet” is a fine answer.

• Who created what’s being licensed, and what did they sign?
• Has anyone else been given rights to it before?
• Which products, places and sales channels does the deal cover?
• How will you know what the other side is selling?
• What happens if the deal goes badly in year one?
• When does the other side want to sign?

Questions worth asking your lawyer

• What should we narrow in the grant before we sign?
• Do we own enough of this to license it?
• How do we keep control of quality if our name is on it?
• What happens to the rights when the deal ends?

Tellbrief adds questions like these to your brief when your answers point to them.

For education only. This article is general information for founders, not legal advice, and reading it doesn’t make you anyone’s client. Tellbrief is not a law firm. For advice about your situation, talk to a licensed lawyer.