Technology licensing lessons from the us experience

Franchising is also a form of technology licensing—the franchiser licenser permits the franchisee licensee to use its trademark or service mark in a contractually specified manner for the marketing of goods or services. The franchiser usually helps support the franchisee through advertising, accounting, training, and related services.

The franchiser also often supplies products needed by the franchisee. Scores of new franchising concepts are converted into profitable businesses every year, and the majority is created in the United States. Recent global franchising successes include personal fitness, flower and candy, and elder care companies.

Many franchises are created especially for entrepreneurs in developing countries and feature relatively affordable license fees. Your control over the technology is weakened because it has been transferred to another company; additionally, licensing usually produces smaller profits for your company than exporting actual goods or services. And in some countries, adequately protecting the licensed technology from unauthorized use by third parties may be difficult.

Once the parties to an intended licence have reached agreement on the proposed terms, it is vital to check the proposed terms against the Technology Transfer Block Exemption Regulation and the Guidelines in order to ensure that the final agreement does not infringe competition law.

In most countries including the UK , patent licences can be recorded and in some countries it is obligatory to record them. It is generally in the interests of the licensee, rather than the licensor, to record the licence, and the licensee therefore usually bears the cost of doing so. In the UK, the licensee will want to record his licence so that anyone who buys the patent from the licensor buys it subject to the licence, and so that he can continue to work under his licence even if the licensor later agrees to grant someone else an exclusive licence.

In the UK, an exclusive licensee may bring legal proceedings for infringement of the patent in his own name, but in order to obtain damages as from the date of the grant of the licence, he must register the licence within six months of its grant. This information is simplified and must not be taken as a definitive statement of the law or practice. Our IP specialists work at all stage of the IP life cycle and provide strategic advice about patent, trade mark and registered designs, as well as any IP-related disputes and legal and commercial requirements.

Read our blogs to keep up to date with developments in the IP world and what we are up to at Mewburn Ellis. We have an easily-accessible office in central London, as well as a number of regional offices throughout the UK and an office in Munich, Germany. All rights reserved. Introduction to Technology Licensing. Select Option. For further advice please contact us. What rights can be licensed? Which rights can be licensed? A licensee may therefore be permitted to carry out all, or any one or more, of these activities.

Is the licensee to be allowed to grant sub-licences? How many licensees? A licence may be an exclusive licence, a sole licence or a non-exclusive licence. Acknowledgement of licensor's rights The licensor may require the licensee to mark all products manufactured or sold under the licence with an acknowledgement that they are, for example, patented products and are sold under licence from the licensor.

Improvements Whenever there is any prospect that the technology will be further developed, the parties should agree upon the ownership and use of the intellectual property rights in improvements which may be made in the future by either party.

Payment Payment is usually by way of royalties, but may be by lump sum, or by a combination of the two. Infringement The parties will need to decide whether the licensor is to be under an obligation to bring infringement proceedings against third parties at the request of the licensee, or merely to lend his name to proceedings brought by the licensee; and most importantly which of them will bear the costs of such proceedings. How long should the licence last? Termination of the licence The licence should include a provision for the licensor to terminate the licence in certain circumstances, for example upon insolvency of the licensee, or in the case of a serious breach of contract by the licensee.

Resolution of disputes The parties may agree that any disputes are to be resolved by mediation or arbitration instead of in the courts.

Competition law Certain terms which might be agreed between a licensor and licensee are in fact not permitted in a licence agreement under UK or European competition law, or the competition law of other jurisdictions.

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