IP Contracts: more contract than IP?

Transactional lawyers who advise on IP contracts need to be aware of a large number of legal topics. The range of topics covered in this blog illustrates that IP law, while of central importance, is by no means the only area of law that needs to be considered.

In our experience, many of the disputes that arise over IP contracts concern other areas of commercial law, including:

IP licensing issue: Areas of law include:
Has the licensee complied with obligations to exploit the licensed IP? Contract law: interpretation of contractual wording, including “best efforts” and similar language
Has the licensor misrepresented the geographical scope of the licensed IP, and did this induce the licensee to sign the contract? Law of misrepresentation (part of the law of tort)
How can rights under the IP contract be enforced, and where must any disputes arising under the IP contract be resolved? Private international law, including validity of law and jurisdiction clauses, and recognition of overseas judgments by international treaty, etc.
Is the licensee required to withhold income or corporation tax from the royalty payments and pay the net amount to the licensor? National tax laws and international tax treaties, including reliefs from double taxation
Is a contractual obligation to pay royalties on products not protected by the licensed IP enforceable? Competition or anti-trust laws, including Article 101 of the EU Treaty
Are there any restrictions on the export of the licensed technology? Criminal laws on “export controls”, eg in the case of militarily-sensitive technology

Thus, a wide range of legal topics may need to be considered when drafting or advising on an IP contract. Which type of lawyer is best placed to given that advice: a specialist IP lawyer or a general commercial lawyer?

The lawyers we face across the negotiating table on IP transactions vary widely in their background and experience.  Some, like us, are transactional IP lawyers.  Some others are primarily patent attorneys or IP litigators.  Yet others are primarily corporate lawyers.  Sometimes, there is a team effort, with IP specialists supporting general commercial lawyers.

However the team is made up, it will be most effective if it has legal knowledge and experience of a range of IP and commercial law subjects.

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Filed under Contract drafting, Intellectual Property

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