Getting an AI-drafted licence agreement checked

A licence agreement produced with an AI drafting tool grants a licence of 'the intellectual property' for a territory and a royalty, and may not identify which rights are licensed, meet the formalities each right requires, or include the quality control that keeps a trade mark registration alive. It may also carry US drafting on royalties, audits and termination that English law treats differently. Working from the Trade Marks Act 1994, the Copyright, Designs and Patents Act 1988 and the rights the licensor in fact holds, I correct the licence in tracked changes and return it with a clean copy and a written explanation, for a fixed fee of £495 in three working days.

Who this is for

Brand owners, designers, publishers, software businesses and product companies in England and Wales whose licence of trade marks, copyright, designs, know-how or brand was produced with an AI tool, and licensees in the same position, before the document is signed. I correct the client's own draft; where a patent is involved, the patent itself is a matter for a patent attorney regulated by IPReg.

What the review checks in an AI-drafted licence agreement

The rights identified and the formalities for each

The licence should identify each right: registered trade marks by number and class, copyright works by description, registered designs by number, unregistered design right and know-how, and the review checks the formalities: section 28 of the Trade Marks Act 1994 requires a trade mark licence to be written and signed by the proprietor, section 92 of the Copyright, Designs and Patents Act 1988 requires an exclusive copyright licence to be in writing, and section 222 governs licences of design right. An AI draft's licence of 'all intellectual property' with no schedule identifies nothing, and the review adds the schedule and checks it against the registers.

The scope of the grant

The review checks whether the licence is exclusive, sole or non-exclusive, the products or services, the territory, the channels, the term, and whether the licensee may sub-license or assign, since an AI draft may grant an exclusive licence where the licensor intends to license others, or omit the reservation of rights that keeps everything not granted with the licensor. It drafts the grant to the licensor's intention, with a reservation of rights and a prohibition on the licensee using the rights outside the scope.

Quality control, approvals and the registration at risk

A trade mark that becomes liable to mislead the public as a result of the use made of it with the proprietor's consent can be revoked under section 46 of the Trade Marks Act 1994, so a licence without quality control puts the registration at risk. The review adds a specification, sample approval, ongoing standards, inspection rights and a right to require withdrawal of non-conforming products, and provides that goodwill from the licensee's use accrues to the licensor and that the licensee will not challenge the marks or register similar ones.

Royalties, minimum guarantees, reporting and audit

The review drafts the royalty on a defined base, net sales with listed deductions, any minimum guarantee and how it is recouped, statements each quarter in an agreed format, payment by a fixed date with statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 if it is late, and an audit right under which the licensee bears the auditor's fee if the shortfall found is more than an agreed percentage. An AI draft's royalty on 'gross revenue' or 'profits' without definition is where disputes start, and the review defines the base.

Sub-licensing, registration and the licensee's rights against infringers

The review checks whether sub-licensing is permitted and on what terms, provides for the licence to be recorded under section 25 of the Trade Marks Act 1994, without which the licence is ineffective against a person acquiring a conflicting interest without knowledge of it, and settles the licensee's rights against infringers under section 30 and, for an exclusive licensee, section 31, which the licensor may want to control. Where the licensor's name goes on products, it can be treated as the producer under Part I of the Consumer Protection Act 1987, and the review adds the product liability indemnity and insurance the licensor needs.

Competition law limits, termination and sell-off

Restrictions on where and to whom the licensee may sell are lawful only within the limits of the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022, and a clause fixing the prices at which the licensee resells is resale price maintenance, prohibited by section 2 of the Competition Act 1998. The review checks the restrictions, drafts termination for a missed minimum, a quality failure, a challenge to the rights, change of control and insolvency, with a sell-off period and delivery up of stock and materials, and the US drafting is replaced: English law and jurisdiction in place of a state's law, ordinary liability in place of 'indemnify, defend and hold harmless', and termination on defined grounds in place of termination at will.

What it costs

Review of an AI-drafted contract, £495. One contract, returned as a marked-up Word document with my amendments as tracked changes, a clean version with the changes accepted, and a written explanation of the changes. Three working days from payment.

Buying online forms the engagement on payment. The scope is what the review of an ai-drafted contract page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own Word document returned with every amendment I consider necessary shown as a tracked change, so you can see exactly what I changed and accept or reject each one
• A clean version with every change accepted, ready to send
• Corrections to anything that is wrong as a matter of English law, unenforceable as drafted, or internally inconsistent
• Missing provisions added where the document has left a gap that matters: usually liability, termination, payment, intellectual property or data
• Comments in the margin where a clause is a commercial choice rather than a legal one, so the decision stays yours
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, with anything you should think about before sending it out
• Follow-up questions on the mark-up answered by email, included

What is not included

• A full rewrite. This is a review and amendment of your document, not a replacement for it. If the draft is structurally unsuitable for the deal, I will say so and quote separately for drafting it properly
• A second round of amendments after you have changed the document again, which I can quote for
• Negotiating with the other side
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Reviewing a document the other side drafted, which is the contract review service, at the same price

Questions I am often asked

Our AI-drafted licence grants 'all intellectual property' in the brand. Is that enough?

It identifies nothing: each right needs to be listed, by registration number for trade marks and designs and by description for copyright and know-how, and each has its own formalities. The review adds the schedule and checks it against the registers.

The draft has no quality control provisions. Does that matter for a trade mark licence?

It does: a mark used without control can become liable to mislead and be revoked, and the brand's standing depends on every product the licensee sells. The review adds specification, approval and inspection provisions and a right to require withdrawal.

Should the licence be registered?

A trade mark licence should be registered at the Intellectual Property Office: until an application is made it is ineffective against a buyer of the mark who did not know of it, and an unregistered licensee may lose costs in infringement proceedings. The review provides for registration and the licensor's consent.

Related guidance and services

• Review of an AI-drafted contract, £495, the service this page describes
• Terms and conditions drafting, £995
• Reviewing a licence agreement for your product or brand
• Reviewing a trade mark licence

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.