Per-Use License

A type of license agreement used in connection with intellectual property that may be used in a host of different products. Such a license provides that a fixed fee be paid with respect to each use of the IP for a new product (as an alternative to a per unit running royalty or in addition to a per unit royalty). A per-use license may also be written as a framework agreement, with only the fee-per-use (and potential running royalty) to be agreed before each use.

The most complicated issue with a per-use license is defining in the license what is a “use.” For example, is the re-creation of a microprocessor (containing a per-use licensed component) using a different manufacturing process, so that physical elements change, but the processor otherwise behaves identically and is used for the same purpose, a second “use” or still the original “use”?