Royalty contract
A royalty contract is an agreement under which one party makes ongoing payments, called royalties, to another for the right to use an asset such as a patent, trademark, copyright, software or resource rights. It is commonly a licence agreement with royalty, reporting and audit terms.
How BC law treats it
Royalty contracts are governed by BC contract law and by the federal statutes that define the underlying intellectual property rights. Under the Copyright Act, RSC 1985, c C-42, s. 13(4), an assignment of copyright, or a licence granting an interest in it, must be in writing signed by the owner.
What it means for your business
Royalty contracts can produce long-term income, so terms on duration, exclusivity and termination deserve careful attention.
Risks and common mistakes
A licence that does not address a change of control of the licensee can leave the licensor dealing with an unwanted counterparty.
For the full explanation, see our entry on Royalty agreement.
General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.
