License and sale

In intellectual property law, an important category of contracts concerns the licence and transfer contracts.

Granting a licence

A licence is a right granted by the owner of a patent right, a trademark right, a design right, another intellectual property right or a combination of such rights. Granting a licence means that to the licensee, a complete or limited permission is granted to engage in activities which could be prohibited by the licenser, the owner of the intellectual property rights in question, without a contract, by virtue of his right or rights. In this respect, one may for instance think of the right to manufacture and market a specific patented construction, or the right to put a movie on video cassettes and rent or sell it.

In exchange for that permission of the owner of the right, a compensation is generally provided, the so-called royalty. Sometimes, companies agree to grant licences to each other, in exchange, for one or more patents or other intellectual property rights. This is also referred to as cross-licencing. Licences can even be granted on the basis of patent applications or available known-how.

Benefits if granting licences

A particularly attractive aspect of granting licences is that it enables one to exploit inventions, trademarks or designs also without having any production and/or distribution, sale and service facilities. By granting licences, it is also possible to broaden the exploitation basis of the result of development work, for instance by taking care of the production and sale in particular areas or for particular applications oneself, and licensing the production and sale in other areas or for other applications, for instance because on does not have any sale and distribution facilities in those other areas or for those other applications.

Comparable situations may arise in respect of trademarks and designs. The conceiver of a design may register this design and subsequently grant a company a licence to produce the design. To trademarks, this method is less applicable. The image of a trademark can for instance be utilized more widely by granting licences for products for which this image is indeed of great importance, but which one cannot produce and sell oneself.
In principle, form and content of licence agreements can be freely determined by parties, although these agreements should in fact meet the European rules in the field of competition law.

Sale

The sale of an intellectual property right is also possible. When, for whatever reason, a company disposes of a specific product line or trademark name, and another party is interested, the rights can be co-transferred.

In close co-operation with patent and/or trademark and design attorneys, our specialists can guide you in the negotiations intended to result in licence or sale agreements, in drafting contracts and in assessing contracts drawn up by other parties. Being experienced in negotiating and drawing up agreements, we can, in consultation with you, conclude the most favorable agreement, whether you are a licensee or licenser, buyer or seller. Our guidance may generally be of a considerable advantage to you.

© V.O. - License and sale

< Back