Licence Agreement

A licence agreement allows the owner of an intellectual property right to keep the right while permitting another party to use it. Trademarks, patents, industrial designs and copyright can all be licensed. Unlike an assignment, ownership does not change.

Types of Licence

• Exclusive licence: The licensor may not grant other licences and may not use the right itself unless expressly reserved.
• Non-exclusive licence: The licensor may use the right and grant other licences. Unless otherwise agreed, industrial property licences are non-exclusive.
• Sublicence: Unless otherwise agreed, the licensee may not transfer its rights or grant sublicences.

Form and Registration

• Industrial property: Licences must be in writing (IPL Article 148(4)). Rights arising from transactions not entered in the register cannot be asserted against third parties in good faith (IPL Article 148(5)). Assignments must be notarised.
• Copyright: Contracts on economic rights must be in writing and list the rights individually (LIAW Article 52). The LIAW calls such permission a “licence to use” (LIAW Article 48).

Key Clauses

• Subject matter, type (exclusive/non-exclusive) and scope
• Territory, term and field of use
• Fees: lump sum, royalties or minimum guarantees
• Quality control (in trademark licences the licensor must take measures to ensure quality; IPL Article 24(4))
• Who sues infringers (under IPL Article 158, an exclusive licensee may sue in its own name unless otherwise agreed; a non-exclusive licensee must first ask the right holder to sue)
• Ownership of improvements and derivative works
• Termination, sell-off of stock and cessation of use at the end of the term

Competition Law

Licences with exclusivity, territorial restrictions or non-compete clauses should also be reviewed under competition law. Block exemption rules on technology transfer agreements provide guidance. See Block Exemption and Non-Compete Obligation.