The purpose of this sample policy is to provide guidelines for the proper treatment of licenses and royalty payments. This policy details procedures related to initial royalty payments, subsequent royalty payments, licensing agreements, and the termination of licensing agreements, both when the company is the licensee and when the company is the licensor.

In this sample, the company enters into technology licensing agreements with third parties in the process of developing new products or improving existing products. In general, the agreements involve the company as the licensee of technology developed by third parties.