Journal of Intellectual Property Law & Practice Advance Access originally published online on February 20, 2008
Journal of Intellectual Property Law & Practice 2008 3(5):305-313; doi:10.1093/jiplp/jpn009
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© The Authors (2008). Published by Oxford University Press. All rights reserved
Practice Point |
Post-termination use of licensed intellectual property by licensees
Legal and practical context: The ongoing dispute between Nokia and Qualcomm exemplifies the complex issues that arise when the licensor–licensee relationship breaks down. It illustrates that any means by which a licensee can secure rights to use licensed IP after termination of a licence agreement can be of great commercial importance, not to mention significant economic value. If a licensee can continue to use licensed IP notwithstanding that its agreement has been terminated, a licensor's ability to control and derive maximum economic benefit from its IP may be fundamentally compromised.
Key points: The means available to licensees to secure such rights vary depending on the kind of IP right licensed, but there are several common themes, which draw on a diverse range of legal rules and concepts, including specific IP concepts and laws (including the rules relating to assignment and licensing, the exhaustion of rights, revocation and invalidation, and defences to infringement claims), contract law and competition law. This article discusses practical implications to be considered when drafting IP licence agreements.
Conclusions: From a licensee's perspective, the termination of its licence agreement is not necessarily the end of the road. Licensees should be aware of these post-termination rights when expecting to face difficult renegotiations with a licensor. From both parties' perspectives, but particularly that of licensor, this article should demonstrate the importance of drafting to avoid any uncertainty that may arise on the termination of a licence agreement.
Key Words: Although it is possible for an IP licence to run forever, the vast majority of such licences are expected to end, whether through expiry, breach, or some other cause. • It is often difficult to foresee what problems may be faced by licensor and licensee post-termination, and too little attention is often devoted to the making of proper, express provision for the protection of the legitimate interests of each party. • This article provides a sharply focused review of post-termination issues and offers advice as to how these issues may be prudently approached.
* Allen & Overy LLP