Patent Licensing Agreement

A patent licensing agreement is a contract through which the patent holder (the licensor) grants a third party (the licensee) the right to exploit the patented invention in exchange for compensation, usually in the form of royalties. This agreement allows the licensee to manufacture, use, market, or import the protected invention while complying with the conditions set forth in the contract.

A license may be exclusive, meaning that the licensee is the only entity authorized to exploit the patent within a specified territory, or non-exclusive, allowing the licensor to grant additional licenses to third parties or continue exploiting the invention themselves.

Legal Framework

In France, patent licensing is governed by several provisions of the French Intellectual Property Code (CPI):

• Article L. 613-8 CPI: This article establishes that a patent may be licensed in whole or in part, covering all or part of the national territory.

• Article L. 613-9 CPI: It requires that patent licenses be registered in the National Patent Register to be enforceable against third parties.

• Article L. 613-11 CPI: This article regulates statutory licenses, which may be granted for certain patents under specific conditions.

• Article L. 613-12 CPI: It addresses compulsory licenses, particularly when the exploitation of a patent is essential for implementing a dependent invention.

Contractual Aspects

A patent licensing agreement must clearly define several key elements:

• The scope of the granted rights (exclusive or non-exclusive)

• The duration of the license

• The territorial scope

• Financial terms, including fixed royalties or payments based on revenue

• Obligations of the parties, such as exploitation guarantees, confidentiality clauses, and termination conditions

Effects and Enforceability

Registering the license in the National Patent Register is a crucial formality to ensure that the licensee’s rights are enforceable against third parties. In the event of a dispute, the absence of registration may prevent the licensee from asserting their rights against a new patent owner.

The licensing agreement is also subject to competition law, particularly regarding restrictive clauses that could unfairly limit the licensee’s commercial freedom or create anti-competitive barriers.

Failure to comply with the contractual terms may result in termination of the agreement and could lead to legal action, including claims for patent infringement or contractual liability.