“Irrevocable” in a Licensing Agreement

Why is it important whether a license agreement does or does not grant an “irrevocable” license?

In licensing agreements, such as a software end user license agreement, one word, “irrevocable,” can mean a lot.

For example, an agreement might include the following in the operative provisions granting the license: Licensor grants to Licensee a non-exclusive, irrevocable, license to use Software.”

By including the word “irrevocable,” the licensor will very probably be unable to terminate the license–even in the event that the Licensee breaches one or more terms of the license agreement.  Accordingly, licensors often refuse to grant an irrevocable license.  An irrevocable license might be appropriate in a situation of full prepayment for the life of the license and where the licensor has little or no obligation to support the licensed product.  To the extent that a licensor is providing services on which the licensed product depends, an irrevocable license is inappropriate.

//////////////// Copyright 2015 - 2017 Justin Stark, Stark Law Office LLC