Licence Scope
Also called: Scope of Licence · Licence Grant
Licence scope defines exactly what a licensee is permitted to do with licensed IP or software — whether the licence is exclusive or non-exclusive, perpetual or term-limited, and restricted to specific uses, users, or territories. It's the boundary of what "having a licence" actually means.
In more detail
A licence is not a binary "granted or not" right — its value depends entirely on scope. An exclusive, perpetual, worldwide licence and a non-exclusive licence limited to internal use for one year are both "licences" to the same underlying IP, with vastly different commercial value.
Key dimensions to define: exclusivity (can the licensor grant the same rights to others), duration (perpetual or term-limited), permitted use (internal only, or resale/sublicensing permitted), and territory. Silence on any of these tends to default toward the narrowest reasonable reading.
For software specifically, scope often also covers number of users or seats, permitted modifications, and what happens to the licence if the underlying contract terminates — a licence that survives termination behaves very differently from one that doesn't.
A company licenses a piece of software "for internal business use." That scope does not permit reselling access to the software to the company's own customers — a materially different (and more valuable) right that would need to be negotiated separately.
What our lawyers check
- Exclusivity, duration, and territorial scope of the licence
- Whether use is limited to internal purposes or permits resale/sublicensing
- What happens to the licence on contract termination
- Any restrictions on modification, reverse engineering, or sublicensing
Contracts where this clause matters
Related terms
This definition is general information about commercial contracting practice, not legal advice. How a clause operates depends on the specific wording of your agreement and the law that governs it. For advice on your contract, have it reviewed by a lawyer.
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