Jacques de Werra, ‘Can exclusive licensees sue for the infringement of licensed IP rights: A case study confirming the need to create global IP licensing rules’, 30 Harvard Journal of Law & Technology, Special Symposium 189-290 (2017).
Jacques de Werra – Can exclusive licensees sue for the infringement of licensed IP rights
Background
Neither the Paris Convention, the Berne Convention nor the TRIPS Agreement address the law of voluntary licensing except for the prerogatives of domestic competition law in Article 40 of the TRIPS Agreement. The matter is left not only to individual licensing agreements but also to different national jurisdictions. The triangle of licensor and licensee and alleged violations by a third party creates a complex legal configuration and legal insecurity. The problem is unsettled, even within the European Union. The paper sets out the issue, discusses case law and concludes that international harmonization on the global level of default rules is warranted. It is an example of how international harmonization proceeds, from ideas set out by scholars to recommendation by international associations. It is interesting to observe however that the modalities of addressing the issue in terms of international law have not yet been examined, rising interesting questions. Should such default rules brought about by recommendations be binding rules? Could informal coordination of courts of law bring about appropriate standards, or should the matter be addressed in a formal treaty? Is this a topic that should be introduced in TRIPS negotiations? Should it be indicative, or binding? Should it be a minimum standard, or frame rules in terms of ceilings? Studying the issue affords insights into the problem of international lawmaking that treaty making normally entails in the field as part of the process of globalization.
Summary
The paper elucidates with great clarity the triangular implications of lawsuits brought by an exclusive licensee against a third party, potentially affecting the interests of the licensor. The author assesses a decentralized legal landscape and the problems this causes in transnational commercial relations, even within the European Union. Recognizing freedom of contract and dispositive law, the author suggests adopting default rules of global reach. These rules should (i) recognize the right to sue third parties, (ii) an obligation to inform the licensor, iii) the right of the licensor to object (prior informed consent) and (iv) the right of the licensor to remain informed. Similar problems arise in the context of safeguarding fair, reasonable, and non-discriminatory (“FRAND”) patent licensing terms and conditions.