Licensing Agreements and the
Protection of Intellectual Property
Chapter 17
© 2005 Thomson/West Legal Studies In Business
1
Business Conditions
that Trigger IPR (Intellectual
Property Rights)
• Grant license
• US provide IPR to foreign manufacturer
which then reexports to U.S.
• Transfer technology for share in joint
venture
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Contracts Clauses
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Geographic limit
Field of use limitations
Output/ customer restrictions
Confidentiality
Ownership/use
Disclose improvements
Grant back
Termination
Non competition
3
International Protection
• Patent and Trademark - Paris Convention:
national treatment for foreign applications
(TRIPS agreement now provides
enforcement mechanism)
• Patent Cooperation Treaty- streamline
application procedure, files international
claim with WIPO
• EU has Community filing
4
International Protection
• Since 1996, EU Community trademark
• Madrid Protocol: centralized filing for
trademarks, WIPO enforced, U.S. finally
signed
5
Comite Interprofession du Vin
de Champagne v. Wineworths
• Can Champagne come from Australia?
6
Geographical Indications under the
Doha Development Agenda
• Creating a multi- register for wines and
spirits to protect
• Extending the enhanced protection to
other products under Article 23 TRIPS
• Who favors?
• What is the status of the negotiations?
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Copyright: 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
8
Domain Names
• August 1999 Internet Corp. For Assigned
Names and Numbers (ICANN)
• First to file
• Except bad faith filing
• WIPO: January 2000, Cyber squatter
using WWF acted in bad faith
• Track record demonstrated quick
resolution
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TRIPS Seeks to Remedy
Problem
• Minimum standard- 1/1/2000
• 20 year patent- all fields of technology,
new, involving an inventive step (nonobvious) 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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Case
• India Patent Protection for
Pharmaceuticals and Agricultural and
Chemical Products, 1997, WTO Appellate
Body
• What did the WTO Appellate body find?
• What steps has India taken since this
ruling?
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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
• Compulsory licenses
• 2003 TRIPS council allowed any WTO member
country to export pharmaceuticals made under
compulsory licenses
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Some Governments’ Attitudes
toward IPR
• Problematic non enforcement,
philosophical antipathy to IPR
• However this restricted technology
transfer and development so countries
ultimately signed TRIPS
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Some Governments’ Attitudes
toward IPR
• Piracy
• Even if enforce, the remedy may not be
sufficient: Walt Disney v. Beijing: Beijing
court ordered an end to printing and
payment of small fine plus attorney’s fees
• A symbolic victory
14
Mechanics of Transfer
• Prior approval
• Notification/registration
• Risks?
15
Gray Market
• Licensor sells to licensee who sells to buyer who
reimports to compete with original licensor
• Parallel imports
• U.S. view in Kmart case (allowing parallel
imports where companies are subject to
common control) compare with ECJ case which
charts different course forbidding reimport from
non EU countries into the EU (regional
trademark exhaustion)
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Who Benefits with Gray
Market?
• Is it fair?
• Which approach is better?
• Who benefits?
17
Franchising: International
Licensing Pitfalls
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Duration
Royalty
Trademark protection
Competition laws
Tied purchase
Geographic exclusivity
Repatriation
•Counter trade
•Tax laws
•Language
problems
•Disclosure
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