CHAPTER 17
Licensing
Agreements and the Protection of
Intellectual Property Rights
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a part of South-Western Cengage Learning.
Reasons for Intellectual Property
Transfer Agreements
• Grant a license (royalty) for intellectual
property right (IPR); limited permission.
• US provide IPRs to foreign manufacturer
which then reexports to U.S.
• Transfer technology for sharing in joint
venture.
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Intellectual Property Rights:
Transfer Arrangements
• Right to Use and Conditions of Use.
– Geographical restriction: within a nation is common.
– Field of Use restriction: limits use and applications.
– Output Restrictions.
• Competitive Circumstances.
– Licensee may demand exclusive rights in exchange for
investment.
• Confidentiality and Improvements.
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International Protection
• Patent and Trademark - Paris Convention:
national treatment for foreign applications
(TRIPS agreement now provides enforcement
mechanism).
• 1970 Patent Cooperation Treaty- streamline
application procedure, files international claim
with WIPO.
• EU has Community filing.
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International Protection
• Trademarks
– Since 1996, EU Community Trademark
Regulation.
– Madrid Protocol: centralized filing for
trademarks, WIPO enforced, U.S. has not
signed.
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International Protection
• Domain Names
– ICANN adopted Uniform Domain Name Dispute
Resolution Policy.
– Complaints submitted electronically to WIPO.
– Mobile Communications Service v. WebReg, RN
(respondent registered domain name in bad faith).
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Copyrights: Berne Convention
• National treatment but does require
MINIMUM substantive laws.
• Copyright symbol and date provides
protection all over the world.
• WIPO Dec. 1996- computer programs are
protected by Berne Convention.
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TRIPS
• Minimum standard- 1/1/2000.
• 20 year patent- all fields of technology, new,
involving an inventive step (non-obvious) and
are capable of industrial application.
• Problems: escape clause- to protect order,
public morality, human or animal or plant life
or to avoid serious prejudice to the
environment.
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Doha Declaration on TRIPS
and Public Health
• The Declaration provides for the extension of the
transition period until January 1, 2016 during which
least developed countries would be exempt from
providing patent and trade secret protection for
pharmaceuticals.
• 2003 TRIPS council allowed any WTO member
country to export pharmaceuticals made under
compulsory licenses.
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War of “Geographical Indications”
• A “mark” in one nation may be a generic in another.
• Standardization is slow, and requires factual analysis
and context.
– See the Comite INterprofessional du Vin de Champagne v.
Wineworths Group, Ltd. (1991).
• Geographical Indications under Doha Development
Agenda. Opponents (including U.S) argue TRIPS
protection is sufficient.
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Continuing TRIPS
Turmoil on Biodiversity
• 1999 – TRIPS Council commenced review of
Article 27.3:
– Permits countries to exclude plants, animals, and
biological processes from patent protection.
• Does TRIPS conflict with UN Convention on
Biodiversity?
– Some developing nations have introduced provisions to
share biological resources. US and others oppose.
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Nonenforcement of IPR Laws
• Problematic non enforcement, philosophical
antipathy to IPR.
• However this restricted technology transfer and
development so countries ultimately signed
TRIPS.
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Nonenforcement of IPR Laws
• Piracy. Motion Pictures, Music.
• 2007—US filed two complaints with WTO
against China for “unfair trade practices”
centering on China’s legal deficiencies.
• Walt Disney Co. v. Beijing Publishing Press:
Beijing court ordered an end to printing and
payment of small fine plus attorney’s fees.
• A symbolic victory
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Mechanics of IPR Transfer Regulations
• Prior Approval Schemes.
• Notification-Registration Schemes.
• Risks?
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a part of South-Western Cengage Learning.
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The Gray Market
• Licensor sells to licensee who sells to buyer who
reimports to compete with original licensor.
• Stimulated by international currency fluctuations.
• Resolution of the Dispute: K Mart Corp. v. Cartier Inc.
(US Supreme Court allowed gray market imports as
long as the foreign manufacturer and the domestic
trademark owner were subject to common control.
• Who Benefits with Gray Market?
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Franchising: International
Licensing Pitfalls
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Duration.
Royalty.
Trademark Protection.
Competition Laws.
Tied Purchase.
Geographic Exclusivity.
Repatriation.
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a part of South-Western Cengage Learning.
• Counter Trade.
• Tax Laws.
• Language
Problems.
• Disclosure.
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