License Agreement non-exclusive License of Manufacturer
Non-Exclusive Manufacturing License Agreement in the UAE
A non-exclusive manufacturing license is an agreement between a brand owner and a manufacturer that allows the manufacturer to produce the brand’s products. As the license is non-exclusive, the brand owner may grant the same license to other manufacturers at the same time. This agreement is governed by the laws of intellectual property (IP) in the UAE to safeguard the brand and increase production.
At HHS Lawyers, our legal drafting services include but not limited to:
Drafting and reviewing the non-exclusive manufacturing license agreement.
Assisting in registering the license with the Ministry of Economy (MoE).
Advising you on the protection of the trademark and sensitive information related to manufacture.
Assisting in all talks and negotiation between the brand owner and the manufacturer.
Managing litigation and dispute resolution issues relating to product quality or royalty payment.
- Legal disputes related to production quality or royalty payments.
What is a Non-Exclusive Manufacturing License?
A license agreement is a formal contract. In this contract, the owner of a patent or industrial design (the Licensor) gives another person or company (the Licensee) permission to make and sell the product.
The term “Non-Exclusive” is the key point. It means:
- The owner can still make the product themselves.
- The owner can also give the same rights to other companies at the same time.
- The manufacturer does not get full control or a monopoly over the product.
This type of agreement is popular with inventors who want to increase production quickly by working with several companies in the UAE or in other countries.
Legal Requirements of Non-Exclusive Manufacturing License Agreement in UAE
A manufacturing license in the UAE must follow certain rules set by the Ministry of Economy. Under Federal Decree‑Law No. 11 of 2021:
- Agreement must be in writing: for the patents, or designs a verbal patent or design license is not considered valid.
- Registration: The license is effective against third parties only when registered in the Industrial Property Register at the Ministry of Economy.
- Duration: The license cannot have a duration exceeding the term of protection for a patent or a design. For example, if a patent is valid for 20 years, the license agreement cannot exceed this duration.
- Clearly defines activities: The agreement needs to specify what the manufacturer can do, where it can sell and for how long.
Note: Article 51 of the law specifies that any license shall be non-exclusive unless stated in writing to be exclusive.
At HHS Lawyers, our nonexclusive licensing agreement includes
At HHS Lawyers, our nonexclusive licensing agreement includes all key provisions for the contract to be valid and effective, which are the following:
Identification
License grant
A grant clause sets out the extent and scope of rights that will be granted to a licensee, including limitations under nonexclusive agreement. This may include a clause that reiterates the agreement is only a license and not an assignment or transfer of ownership.
Compensation
This includes any amount of compensation to the licensor under the agreement and whether to pay a fixed amount.
Licensee’s Obligations
The obligation of the license is outlined in this clause. The rights and permits will be disclosed in this section. Steps are taken by the licensee to ensure that the necessary conditions are taken.
Intellectual Property Rights
Limitation of Liability
This part includes acknowledgement of the licensee and also to provide rules for any loss or damage in relation to the license being granted.
Confidentiality
This is a kind of non disclosure provision that has to be mentioned so that no third party has access to confidential information in a contract.
Our legal drafting services in UAE allows our experts
Our legal drafting services in UAE allows our experts that comprise our team in helping with the expert drafting and handling of different kinds of licensing agreements apart from non-exclusive license agreements, such as:
Enterprise license agreement
This enterprise license agreement is usually drafted to permit unlimited use of a product or system throughout an enterprise, although some limitations and restrictions may apply. Our team of lawyers can carefully tailor the terms of contract, depending on the needs of the customer and software provider.
Product licensing agreement
This is a key document to protect the business interest of a company. This also includes taking permission from a manufacturer to sell product in a specific area. The rights are gained after the payment of royalty to the original owner.
Legal Drafting Services in Dubai
Seeking the help of lawyers at HHS Lawyers for legal drafting is the best way in making an important legal document such as a license agreement. We take utmost care in drafting the legal agreement as per the client’s requirements. Call us today if you want to book a consultation with our team.
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Key Sections of a Manufacturing License Agreement
When we draft a contract for your business we make sure that all the relevant clauses are included to fully protect your interests:
Parties and Subject Matter
Grant of Rights (Non-Exclusive Clause)
This license is non-transferable. This means that the manufacturer has no right to assign, sub-license or otherwise transfer the license to a third party without express written permission from the owner.
This enables the owner to license multiple manufacturers, while maintaining full control over who manufactures the product and how it is produced.
Quality Control and Standards
Royalties & payment terms
A single upfront amount
Percentage royalty from the sale of each item
Annual minimum royalty.
Intellectual Property (IP) Protection
Termination & Exit Route
Why You Need a Registered Agreement in the UAE
Many businesses do not register their license with the Ministry of Economy, but registration is extremely important. It is a basic legal requirement for full protection. If another company copies your product, a registered licensee may have the right to join the owner in taking legal action.
Also, if the license is not registered, the government or the courts may not accept that the manufacturer has the legal right to produce the goods if a dispute happens.
Common Mistakes in Manufacturing License Agreements
- Unclear Territories: If the contract does not clearly say “UAE,” the manufacturer may think they can sell or export the products to other countries — even places where you already have other partners.
- No Sub‑Licensing Rule: If the contract does not clearly say that sub‑licensing is not allowed, the manufacturer might try to give the work to another factory. UAE law generally does not allow sub‑licensing unless it is mentioned in the agreement.
- Ignoring the New Civil Law: The UAE Civil Transactions Law (Federal Decree‑Law No. 25 of 2025) requires that both parties to the contract must act in Good Faith during negotiations. If someone walks away from the deal in an unfair manner or behaves dishonestly during drafting, they are liable to pay compensation.
Services Offered by HHS Lawyers
Our team of lawyers and IP specialists provides complete support in regards to manufacturing licenses in Dubai, as well as within the UAE. We provide:
Custom Contract Drafting
Ministry of Economy Registration
Legal Due Diligence
Dispute Resolution and Enforcement
Amendment and Renewal
FAQ’s
What is the meaning of patent license?
What is the typical license agreement?
A license agreement is an agreement between two parties to use a property under certain parameters. This type of agreement involves a licensee and a licensor. For the drafting of such type of contract, a lawyer has to be hired to ensure all the essential components are included and for all concerning parties to have sufficient protection.
How does a license agreement work?
How does a licensor get paid?
A guarantee is a fee the licensor receives from a license for the use of a trademarked property. It is often anchored on expected sales for the value. As for royalty, it is a percentage of the sales that have been earned by the licensee and will be paid to a licensor. The payment terms will be mentioned in the licensing agreement.
Contact HHS Lawyers Today
We want to help protect your invention and your hard work. Whether you are an inventor searching for a trustworthy manufacturer, or a factory you are looking to license technology, we are standing by to help you.
