Licensing

Question 1

What makes a valid contract?

Answer 1

1. Offer
2. Acceptance
3. Consideration - parties agree to exchange something
4. Intention to create legal relations - intend to create an enforceable contract

Question 2

What is an IP license?

Answer 2

A contract between the owner of a specific IP right and a third party that provides the third party with right to use the IP, subject to terms and conditions set out in license

Licensor — party that owns the TM/other IP
Licensee - third party that wants to use the TM/other IP

Question 3

What are the types of license?

Answer 3

1. Exclusive - ONLY the licensee can use the licensed trademarks (the licensor cannot use the IP or grant a license to anyone else)
2. Sole - ONLY the licensor and licensee can use the licensed trademarks (but cannot grant another license to third party)
3. Non-exclusive - the licensor and licensee can use the trademarks, but licensor can also grant as many licenses as it wants

Question 4

What is the information that must be included in a license agreement?

Answer 4

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Parties - full details of licensor and licensee/where possible company numbers
Type of License - exclusive, sole or non-exclusive
IP Rights - detail out the IP right that are to be licensed and if the license is only in respect to some of the goods/services these should be defined
Duration - how long does the license last for? Is it limited or perpetual?
Territory - the countries/territory need to be clearly defined, is it worldwide or confined to a couple of territories?
Payment - is there a fee for the license? E.g one off payment from licensee to licensor, or royalties
Quality control - important clause to make sure that products, packaging and other materials produced by licensee that bear the TM meet certain standards set by the licensor

Is there are real clause/termination license/infringement situations

Question 5

How to record a license at the UKIPO?

Answer 5

Form TM50 - £50

Question 6

What information is required in a form TM50?

Answer 6

1. Trademark(s) numbers
2. Name of owner of TM (licensor)
3. Name of licensee
4. Start and end date of license
5. Is the license exclusive - yes/no
6. Details of any geographical limitation
7. All goods/services or just some?
8. Signature of current owner (or representative) - without signature will need a copy of the License agreement

Question 7

Why is it necessary/desirable to record a license in the UK?

Answer 7

1. Once recorded the licensee has a right to call on the licensor to bring infringement proceedings (or in some cases, if an exclusive license, the licensee can bring infringement proceedings in their own name, but license agreement may preclude this). Or licensee can call upon licensor to bring infringement proceedings and if they fail to do so/refuse, the licensee can do so in their own name (unless license agreement states otherwise)
2. Ability of licensee to recover costs in an infringement action may be affected if not recorded in time
3. Recording a license at the UKIPO is deemed to put third parties on notice of the licensee’s rights (e.g important for assignments because if assignee did not know about license agreement would not have to honor it)

Question 8

How do you record a license at WIPO?

Answer 8

Form MM13

CHF 177 for each international registration

Can be submitted directly to WIPO or through Office of Origin

Question 9

What information do you need on a form MM13? ( recordal of license)

Answer 9

1. TM numbers
2. Name of owner of TM
3. Name of licensee
4. Details of the contracting parties covered by the license/any geographical limitations
5. All goods/services or some?
6. Duration of license
7. Signature of licensor and licensee
8. Exclusive, sole or non exclusive

Question 10

What do you need to be careful with when recording a license at WIPO?

Answer 10

Some countries don’t allow for the recordal of licenses (Australia, New Zealand)

Some countries allow for recordal, but not through WIPO (OAPI, Brazil, Cambodia etc)

Question 11

How should you deal with/what should you be aware of when recording a license for overseas territories?

Answer 11

Can be quirks so best to seek advice from local counsel if licensing is necessary/recommended/what is required

For some countries licensing of applications not allowed (only once mark has registered) Russia, Bahrain

For some countries recordal of applications not allowed (whilst you could license application to third party, you can’t register it until mark has registered), India, UAE

Although EUTM is a unitary right - can be licensed by only one or some EU member states

some countries may need additional documentation - e.g China

Question 12

In which countries is a recordal of license mandatory?

Answer 12

Russia, Indonesia and Japan

Question 13

What is a franchise?

Answer 13

Granting of a license by one party (the franchisor) to another (franchisee)

E.g Starbucks, Dominoes, McDonalds

Franchisee is entitled to own their own business under the brand, systems and proven business models of the franchisor - uniform standards across all franchises