Intellectual property (IP) licensing is a significant strategic tool for exploiting inventions and brands. However it is often neglected that for each of the different intellectual property rights, a degree of bespoke treatment is required at licensing level in the UK. In this webinar, Selina Hinchcliffe explains some of the common issues encountered when drafting and negotiating IP license agreements; identifies the key differences in provisions required based on the rights licensed; and provides solutions to the top three common pitfalls in intellectual property rights licensing provisions.

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IP licensing: how to
avoid the common pitfalls

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Connect with Selina Hinchliffe
selina.hinchliffe@brownejacobson.com
+44 (0)330 045 2199
IP licensing: how to
avoid the common pitfalls
Connect with Nick Smee
nick.smee@brownejacobson.com
+44 (0)330 045 2122

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IP licensing and
scope
Licensing is a hot topic
• total global licensing for 2017
amounted to US$262.9 billion
• licensing IP can be highly lucrative

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IP licensing and
scope
Today’s session will:
• focus on some of the key formality
differences between the IP rights
when licensed
• highlight some common pitfalls

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IPRS in a licensing
agreement and
formalities
Patent licence
• executed in writing and signed by or
on behalf of all parties
• registered within six months of the
date of the licence agreement

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IPRS in a licensing
agreement and
formalities
Trade mark licence
• executed in writing and signed by or
on behalf of the licensor
• registered within 6 months for all
rights to have effect

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IPRS in a licensing
agreement and
formalities
Copyright licence
• executed in writing and signed by or
on behalf of the licensor
• cannot be registered (in the UK)

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IPRS in a licensing
agreement and
formalities
Design rights
• an exclusive licence of registered or
unregistered designs must be in
writing and signed by or on behalf of
the licensor
• a licensee of a registered design must
resister the licence

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Licensor shall grant Licensee a licence to all its rights in the Licensed
IP for the Term.
Pitfall 1: scope of licence

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Licensor shall hereby grants Licensee…
a [fully paid-up] [royalty free / royalty bearing] [exclusive / sole /
non-exclusive] [perpetual] [irrevocable] [sub-licensable / non-sub-
licensable] licence
…to all its rights in the Licensed IP…
[for any purpose / for the purpose of advertising, marketing and
selling the Licensed Products]…
[in the UK / EU]…
[for the Term].
Pitfall 1: scope of licence

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Pitfall 2:
financials
Factors that should be taken into
account in negotiating an appropriate
royalty rate
• the anticipated commercial benefits
• the business sector that the licence is
used in

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Pitfall 2:
financials
The basis for calculation and
structure of royalties
• arms length sale price of the licensed
product
• fixed payment per licensed product

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Pitfall 2:
financials
Other structures exist but are less
common
• share of the licensee’s profits
from the sale of the licensed
product
• royalties that accrue to
manufacturing

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Pitfall 2:
financials
• duration payable
• scope of what the payment
attaches too
• point at which payment accrues
• minimum royalties
• audit provisions

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Pitfall 3: dispute
resolution and
Jurisdiction
• particularly important in cross-
boarder licences
• for Licensor, ability to enforce
termination by means of obtaining
an injunction may be key
• where are interim injunctions
obtainable, and how quickly could
one be enforced?

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Pitfall 3: dispute
resolution and
Jurisdiction
• could confidential information be
protected via other practical
measures?
• would technical disputes be
suitable for expert determination?
• also, consider other dispute
resolution options, such as
escalation procedures