Royalty Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Royalty Agreement

"I need a Royalty Agreement for licensing our software technology to a UAE-based distributor, with quarterly payments of 15% of net sales and minimum annual guarantees, starting from March 2025."

Document background
The Royalty Agreement is a critical commercial document used when one party (the licensor) grants another party (the licensee) the right to use specific intellectual property, technology, or assets in exchange for royalty payments. Operating under UAE law, this agreement is essential for businesses seeking to monetize their intellectual property or acquire usage rights in the UAE market. The document must comply with UAE Federal Law No. 7 of 2002 (Copyright Law), Federal Law No. 17 of 2002 (Industrial Property Law), and other relevant UAE commercial and tax regulations. A Royalty Agreement typically includes detailed provisions for calculation methods, payment terms, quality control, audit rights, and territory restrictions, while addressing specific UAE legal requirements such as local agent provisions and tax considerations.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including full legal names, registration details, and addresses

2. Background: Context of the agreement, including brief description of parties' businesses and purpose of the arrangement

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Grant of Rights: Specific rights being licensed or transferred that are subject to royalty payments

5. Calculation of Royalties: Detailed methodology for calculating royalty payments, including rates, basis of calculation, and any minimum guarantees

6. Payment Terms: Payment schedule, currency, method of payment, and handling of taxes

7. Reporting and Audit Rights: Requirements for financial reporting and right to audit royalty calculations

8. Intellectual Property Rights: Ownership and protection of underlying intellectual property

9. Quality Control: Standards and requirements for use of licensed property

10. Term and Termination: Duration of agreement and circumstances for termination

11. Confidentiality: Protection of confidential information exchanged during the agreement

12. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

13. General Provisions: Standard legal provisions including force majeure, notices, and assignment

Optional Sections

1. Territory Restrictions: Used when the royalty rights are limited to specific geographic regions

2. Sub-licensing Rights: Include when licensee is permitted to sub-license the rights to third parties

3. Marketing and Promotion: Include when there are specific requirements for marketing licensed products/services

4. Development Obligations: Used in technology licensing where ongoing development is required

5. Minimum Performance Requirements: Include when there are minimum sales or usage requirements

6. Competition Restrictions: Used when including non-compete or market restriction provisions

7. Insurance Requirements: Include when specific insurance coverage is required for licensed activities

8. Change of Control: Include when agreement terms may be affected by ownership changes

9. Export Control: Used when licensed rights involve international trade restrictions

Suggested Schedules

1. Schedule 1 - Licensed Property: Detailed description of intellectual property subject to royalties

2. Schedule 2 - Royalty Rates: Detailed breakdown of royalty rates, including any tiered structures

3. Schedule 3 - Calculation Examples: Examples of royalty calculations for different scenarios

4. Schedule 4 - Reporting Template: Standard format for periodic royalty reports

5. Schedule 5 - Quality Control Standards: Detailed quality requirements and specifications

6. Schedule 6 - Approved Sub-licensees: List of pre-approved sub-licensees if applicable

7. Appendix A - Technical Specifications: Technical details of licensed technology or products

8. Appendix B - Brand Guidelines: Guidelines for use of licensed trademarks or brands

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Technology and Software

Media and Entertainment

Manufacturing

Pharmaceuticals

Consumer Goods

Fashion and Luxury

Food and Beverage

Automotive

Oil and Gas

Healthcare

Publishing

Music Industry

Gaming

Telecommunications

Relevant Teams

Legal

Finance

Commercial

Business Development

Intellectual Property

Compliance

Tax

Operations

Licensing

Brand Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Commercial Director

Intellectual Property Manager

Licensing Manager

Business Development Director

Finance Manager

Legal Counsel

Contract Manager

Royalty Administrator

Compliance Officer

Tax Manager

Brand Manager

Operations Director

Industries
UAE Federal Law No. 7 of 2002 (Copyright Law): Governs copyright protection and related rights, essential for establishing the legal basis of intellectual property that may be subject to royalty payments
UAE Federal Law No. 17 of 2002 (Industrial Property Law): Regulates patents, industrial designs, and trade secrets, which are often core elements in royalty agreements
UAE Federal Law No. 37 of 1992 (Trademark Law): Provides framework for trademark protection and licensing, relevant when royalties involve trademark usage rights
UAE Federal Law No. 18 of 1993 (Commercial Transactions Law): Governs commercial transactions and business relationships, providing general framework for commercial agreements
UAE Federal Law No. 5 of 1985 (Civil Transactions Law): Contains general principles of contract law applicable to royalty agreements, including formation, validity, and enforcement
UAE Federal Law No. 8 of 2004 (Financial Free Zones Law): Relevant for royalty agreements involving entities in UAE free zones, which may have specific regulations
UAE Federal Decree-Law No. 33 of 2021 (Tax Procedures Law): Governs tax implications of royalty payments, including withholding tax requirements and reporting obligations
UAE Federal Law No. 4 of 2012 (Competition Law): Ensures royalty agreements comply with competition regulations and don't create unfair market advantages
UAE Cabinet Decision No. 58 of 2016 (Executive Regulations of Federal Law No. 4 of 2012): Provides detailed implementation guidelines for competition law compliance in commercial agreements
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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