Rome I Regulation

The Rome I Regulation, Regulation (EC) No 593/2008 of 17 June 2008, determines the law applicable to contractual obligations in civil and commercial matters in the Member States of the European Union, with the exception of Denmark. It applies to contracts concluded on or after 17 December 2009 and has universal application, the law it designates applying even where it is the law of a third State. It governs contracts relating to intellectual property rights, whether assignment, licence or research agreements, without governing the rights themselves.

Choice of law by the parties

Under Article 3, the contract is governed by the law chosen by the parties. The choice may be express or clearly demonstrated by the terms of the contract or the circumstances, and it may cover only part of the contract. It cannot, however, override the mandatory provisions of the law of a country with which all other elements of the situation are connected, nor overriding mandatory provisions within the meaning of Article 9. An express choice-of-law clause remains the safest course in an international licence agreement.

Applicable law absent a choice

Article 4 lists categories of contracts, including franchise and distribution, but neither the assignment nor the licensing of intellectual property rights. These contracts therefore fall under the general rule, which designates the law of the country of habitual residence of the party required to effect the characteristic performance, subject to an escape clause in favour of a country with manifestly closer connections. Identifying that performance is debated for licences, depending on whether emphasis is placed on the grant of the right by the proprietor or on the licensee’s exploitation obligations. The Court of Justice of the European Union has also held, for the purposes of the rules on jurisdiction, that a licence is not a contract for the provision of services.

The boundary with the law of the protected right

The law of the contract governs the parties’ obligations, interpretation, performance and the consequences of non-performance. The existence, scope and enforceability against third parties of the intellectual property right are, by contrast, governed by the law of the country of protection, the lex loci protectionis. A licensee who exceeds the limits of its licence raises a difficult characterisation issue, between contractual liability and infringement governed by the Rome II Regulation. For European patents, the right to the patent of an employee inventor is determined, under Article 60 of the European Patent Convention, by the law of the State in which the employee is mainly employed.

Key points

The Rome I Regulation governs the contract, not the intellectual property right it concerns. The applicable law should be expressly stipulated in any international licence or assignment, as the default rule leaves real uncertainty as to the characteristic performance. Also check how this clause fits with the jurisdiction clause and with the mandatory rules of the country of protection, in particular on the form and registration of assignments.

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This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats litigates patent disputes before the Paris Judicial Court, the Paris Court of Appeal and the Unified Patent Court. Where the question arises in a real case, the useful moment is almost always before proceedings are issued.

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