1 Licensing Agreements and the Protection of Intellectual Property Chapter 17 © 2005 Thomson/West Legal Studies In Business

2 Business Conditions that Trigger IPR (Intellectual Property Rights) Grant license US provide IPR to foreign manufacturer which then reexports to U.S. Transfer technology for share in joint venture

3 Contracts Clauses Geographic limit Field of use limitations Output/ customer restrictions Confidentiality Ownership/use Disclose improvements Grant back Termination Non competition

4 International Protection Patent and Trademark - Paris Convention: national treatment for foreign applications (TRIPS agreement now provides enforcement mechanism) Patent Cooperation Treaty- streamline application procedure, files international claim with WIPO EU has Community filing

5 International Protection Since 1996, EU Community trademark Madrid Protocol: centralized filing for trademarks, WIPO enforced, U.S. finally signed

6 Comite Interprofession du Vin de Champagne v. Wineworths Can Champagne come from Australia?

7 Geographical Indications under the Doha Development Agenda Creating a multi- register for wines and spirits to protect Extending the enhanced protection to other products under Article 23 TRIPS Who favors? What is the status of the negotiations?

8 Copyright: Berne Convention National treatment but does require MINIMUM substantive laws Copyright symbol and date provides protection all over the world WIPO Dec computer programs are protected by Berne Convention

9 Domain Names August 1999 Internet Corp. For Assigned Names and Numbers (ICANN) First to file Except bad faith filing WIPO: January 2000, Cyber squatter using WWF acted in bad faith Track record demonstrated quick resolution

10 TRIPS Seeks to Remedy Problem Minimum standard- 1/1/ year patent- all fields of technology, new, involving an inventive step (non- obvious) and are capable of industrial application Problems: escape clause- to protect order, public morality, human or animal or plant life or to avoid serious prejudice to the environment

11 Case India Patent Protection for Pharmaceuticals and Agricultural and Chemical Products, 1997, WTO Appellate Body What did the WTO Appellate body find? What steps has India taken since this ruling?

12 Doha Declaration on TRIPS and Public Health The Declaration provides for the extension of the transition period until January 1, 2016 during which least developed countries would be exempt from providing patent and trade secret protection for pharmaceuticals Compulsory licenses 2003 TRIPS council allowed any WTO member country to export pharmaceuticals made under compulsory licenses

13 Some Governments’ Attitudes toward IPR Problematic non enforcement, philosophical antipathy to IPR However this restricted technology transfer and development so countries ultimately signed TRIPS

14 Some Governments’ Attitudes toward IPR Piracy Even if enforce, the remedy may not be sufficient: Walt Disney v. Beijing: Beijing court ordered an end to printing and payment of small fine plus attorney’s fees A symbolic victory

15 Mechanics of Transfer Prior approval Notification/registration Risks?

16 Gray Market Licensor sells to licensee who sells to buyer who reimports to compete with original licensor Parallel imports U.S. view in Kmart case (allowing parallel imports where companies are subject to common control) compare with ECJ case which charts different course forbidding reimport from non EU countries into the EU (regional trademark exhaustion)

17 Who Benefits with Gray Market? Is it fair? Which approach is better? Who benefits?

18 Franchising: International Licensing Pitfalls Duration Royalty Trademark protection Competition laws Tied purchase Geographic exclusivity Repatriation Counter trade Tax laws Language problems Disclosure