Licence can refer to patent and design rights, related know-how and trade marks.
It provides the licensee with the right to use an IP right for a certain period of time, for a fee, usually in a specific geographic area. At the same time, this allows the IP right’s owner to extend their brand into new markets quicker, to generate profit (through set fee or royalty), reduce costs and time to market penetration and therefore, often, gain competitive advantage.
Once a license deal is made, the choice is – to record it before the local IPO/s or not.
In the 8 jurisdictions we operate in, it is not necessary to record licenses – however, we recommend our client doing so, as the benefits can be important.
If a licence is not recorded, the licensee is not mentioned in the local IPO’s files and cannot act in order to defend and/or protect the IP right in question. As very often the IP owner can be further away and not be aware of the situation this can complicate matters. Litigation and dispute matters are not the only obstacles that may arise. Rarely, due to dis/agreements, the IP owner might not renew the IP right that is the object of the license.
We had such a case in our practice – again, renewal of a trade mark (unlike annuity payments) is entrusted to the IP owner or recorded licensee and their legal representatives only.
In summation, although recordals of the license do take time and funds, in the end they do afford the licensee to act in cases of IP litigation or infringement and also it enables the licensee to make TM renewals.
And finally this is beneficial for both the licensor and the licensee.