Patent Contracts: Licence, Assignment, Co-ownership

A technology transfer is not limited to the patent itself. A technology transfer agreement may combine a licence or assignment, disclosure of know-how, technical documentation, assistance and rules governing improvements and new applications. We ensure that the rights transferred, permitted uses, confidentiality, evidence of delivery and the treatment of future results are clearly identified.

• Licence agreement, exclusive or non-exclusive, portfolio licences and cross-licences.
• Patent assignment and partial assignment, by territory or by field of activity.
• Co-ownership agreement between co-applicants, laboratories and industrial partners.
• Non-disclosure and know-how communication agreements, aligned with the protection of trade secrets.
• Research, consortium and technology transfer agreements, including the allocation of results.
• Intellectual property clauses in employment contracts and the handling of employee inventions.
• Undertakings given to a standardisation body and negotiation of FRAND licences on standard essential patents.

Two formal rules govern the effectiveness of the transaction. Both assignments and licences must be evidenced in writing, failing which they are void (Art. L. 613-8 CPI). The instrument is then enforceable against third parties only once recorded in the national patent register kept by the INPI (Art. L. 613-9 CPI), subject to third parties who knew of the instrument when they acquired their rights.

For a European title, assignment of the application is governed byarticle 72 CBE : it must be made in writing and requires the signature of the parties to the contract. A failure to record is paid for when the time comes to sue, when the admissibility of the assignee or licensee is challenged by the defendant to the infringement action.

Articles L. 613-29 à L. 613-31 CPI govern the co-ownership of an application or a patent: personal exploitation by each co-owner subject to fair compensation of those who do not exploit, an infringement action open to a single co-owner subject to notice to the others, non-exclusive licences subject to an offer to assign the share, exclusive licences subject to the agreement of the other co-owners or to judicial authorisation, and a right of pre-emption on the assignment of a share.

That regime is merely a default. Article L. 613-32 CPI allows the co-owners to depart from it at any time by a co-ownership agreement. It is that document, not the code, that will decide in practice who manages the extensions and the examination proceedings, who pays the renewal fees, who conducts the infringement action, and how royalties and damages are apportioned.

A few provisions alone determine the value of the contract on the day of disagreement: the royalty base and method of calculation, the audit right and its contractual limitation period, the warranty of title, the allocation of the conduct of actions and of their costs, the notice period for termination, the governing law and the chosen forum.

On the fate of royalties, the Court of Justice has held that a royalty may remain payable for the period during which the technology was used, even though the patent is later revoked or held not to be infringed, provided the licensee was free to terminate the contract on reasonable notice (CJEU, 7 July 2016, Genentech, C-567/14). The termination clause then becomes the licensee’s real protection, well ahead of the warranty clause.

The Paris Judicial Court has exclusive jurisdiction over patent actions, including where they concern both a patent question and a related question of unfair competition (Art. L. 615-17 CPI). A purely contractual dispute, by contrast, follows the ordinary rules of jurisdiction and the agreed jurisdiction clause, until the validity or scope of the title is called into question.

The Unified Patent Court does not hear purely contractual actions: the list of its competences, in Article 32 of the Agreement, does not cover licence disputes as such, even though the FRAND defence is argued before it within an infringement action. Finally, Article L. 615-17 CPI expressly preserves recourse to arbitration, under the conditions of Articles 2059 and 2060 of the code civil : for multi-territorial licences it is often the fastest and most discreet route, as explained on our page arbitration and mediation in patent matters.