It is important to consider how to put a limitation on IP licenses in Japan or any agreement involving Japan. Granting another company or person a license for intellectual property, is a powerful way to turn patented, copyrighted or trademarked ideas into a source of reoccurring profit. However, granting a license that is too broad can result in a wasted opportunity and lost profit. Therefore it is important to tailor the license agreement to fit exactly the parameters that fit the license fee being paid.
The most common way to put a limitation on IP license in Japan is to make it non-exclusive. This allows the rights holder to grant further licenses to other parties and continue to develop other revenue streams. Additionally, many licenses are also limited in geographical or chronological scope. For example, most license agreements contain a territory clause that limits where the license can be exercised and a term, after which the license expires.