Patent Assignment and Licenses

Copyight, Brain League IP Services, 2009. Non-commercial use is permitted.

Patent Assignments and Licenses

ByDr. Kalyan C. KankanalaBrain League IP Services

Transfer of Patents

• Assignment

• License

Assignment

• Transfer of Ownership

• Partial or Complete

• Writing and Signature

• Register

License

• Authorization or Permission

• Exclusive Rights

• Territory

• Writing

• Signature

• Register

Types of Licenses

• Exclusive

• Non-exclusive

• Sole

Important clauses

• Recitals

• Definitions

• Grant

• Royalties

• Term and Termination

Recitals

• Parties – Licensor/Licensee

• Addresses

• Dates

• Background of the transaction

Definitions

• Interpretation clause• Consistently used words

– Specific/certain/lucid

• Attribute specific meaning• Apply to entire agreement

Examples• Licensor shall mean ABC company having a place of business in Bangalore

and shall include its subsidiaries, assignees and legal representatives.

• Licensee shall mean Kalyan, resident of xyz, Bangalore and shall include his successors, assignees, administrators, executors and other legal representatives.

• Licensed Patent shall mean patents granted in USA under patent numbers xxx, yyy and patent applications pending before Indian Patent Office having filing numbers xxx, and YYY.

Grant Clause• Most important• Defines scope of agreement• States

– Parties– Type– Subject– Rights– Territory– Term

Example• Licensor grants to Licensee a nonexclusive license to use the Licensed

Software within the territory of India from 1st January, 2005 to 1st January, 2006.

• This clause specifies • Who grants to whom -Licensor to Licensee.• Type of license - Nonexclusive License• Rights – Use Licensed Software• Territory - India• Dates - January, 2005 to 1st January, 2006

Term and Termination

• Term• Events

– Material Breach - Nonpayment of royalty, etc.– Bankruptcy– Insolvency– Act of god

• Rights after termination• Confidentiality

Example• Unless earlier terminated as hereinafter provided,

this Agreement shall extend to each country in the Territory for a term of ten (10) years from the Effective Date. The term of the agreement is renewable at the option of the parties and such term and conditions shall be finalized after negotiations based on terms agreeable to both the parties.

Royalty Clause

• Type of Royalty– Lump sum royalty– Fixed Royalty– Running royalty

• Combination.• Mode and Date of payment• Accounting and Record keeping• Non payment consequences.

Example

• XYZ agrees to pay ABC, a fixed royalty of Twenty-Thousand-Dollars ($ 20,000) per every Calendar Year after the first year. For the first Calendar Year, XYZ shall pay ABC a fixed royalty of Ten-Thousand Dollars ($ 10,000). Such sum shall be paid on or before December 11th of every Calendar Year.

Other Clauses

• Indemnity

• Warranty

• Liability

NRDC V. ABS

• Patent License

• Not registered

• Expiry of patent term

• License invalid

• Compulsory Licenses

Working of a Patent

• Reasonable prices

• Public Health

• Public Interest

• Technology Transfer

• Industrial Progress

Conditions

• Reasonable requirements of public

• Reasonably affordable prices

• Working in India

Procedure

• Any person

• Three years – Patent Grant

• Prima Facie Case

• Publication

• Opposition

• Grant

Compulsory Licenses

• Related Patents

• Emergency

• Expoert

Example 1

• There is a SWINEFLU outbreak in India and more than hundred lives are lost in a period of one month. X, a pharma company, holds a patent over a drug to prevent SWINEFLU. On recognizing the need for the drug X starts manufacture of the drug on a large scale by tying up with companies A, B and C. D, a generic company approaches X for a manufacturing contract and on being refused applies for a compulsory license.

• Will a compulsory license be granted to D?

Example 2

• A acquires a patent over a tyre and B holds a patent over the rim used in such tyres. A approaches B for a license of the patented rim to manufacture and sell his patented tyre. On B's refusal, A files for a compulsory license.

• Will the license be granted?

Example 3

• Rove, a bike manufacturing company holds twenty patents over electic bike technology. It makes five electric bikes every year and sells each bike at a cost of 5 lakhs. A, another bike manufacturing company applies for a compulsory license over all the patents.

• Will a compulsory license be granted?

Thank You

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