1. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. CHAPTER 17 Licensing Agreements and the Protection of Intellectual Property Rights

2. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 2 Grant a license (royalty) for intellectual property right (IPR); limited permission. US provide IPRs to foreign manufacturer which then reexports to U.S. Transfer technology for sharing in joint venture. Reasons for Intellectual Property Transfer Agreements

3. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 3 Intellectual Property Rights: Transfer Arrangements Right to Use and Conditions of Use. –Geographical restriction: within a nation is common. –Field of Use restriction: limits use and applications. –Output Restrictions. Competitive Circumstances. –Licensee may demand exclusive rights in exchange for investment. Confidentiality and Improvements.

4. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 4 International Protection Patent and Trademark - Paris Convention: national treatment for foreign applications (TRIPS agreement now provides enforcement mechanism). 1970 Patent Cooperation Treaty- streamline application procedure, files international claim with WIPO. EU has Community filing.

5. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 5 International Protection Trademarks –Since 1996, EU Community Trademark Regulation. –Madrid Protocol: centralized filing for trademarks, WIPO enforced, U.S. has not signed.

6. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 6 International Protection Domain Names –ICANN adopted Uniform Domain Name Dispute Resolution Policy. –Complaints submitted electronically to WIPO. – Mobile Communications Service v. WebReg, RN (respondent registered domain name in bad faith).

7. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 7 Copyrights: Berne Convention National treatment but does require MINIMUM substantive laws. Copyright symbol and date provides protection all over the world. WIPO Dec. 1996- computer programs are protected by Berne Convention.

8. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 8TRIPS Minimum standard- 1/1/2000. 20 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.

9. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 9 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. 2003 TRIPS council allowed any WTO member country to export pharmaceuticals made under compulsory licenses.

10. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 10 War of “Geographical Indications” A “mark” in one nation may be a generic in another. Standardization is slow, and requires factual analysis and context. –See the Comite INterprofessional du Vin de Champagne v. Wineworths Group, Ltd. (1991). Geographical Indications under Doha Development Agenda. Opponents (including U.S) argue TRIPS protection is sufficient.

11. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 11 Continuing TRIPS Turmoil on Biodiversity 1999 – TRIPS Council commenced review of Article 27.3: –Permits countries to exclude plants, animals, and biological processes from patent protection. Does TRIPS conflict with UN Convention on Biodiversity? –Some developing nations have introduced provisions to share biological resources. US and others oppose.

12. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 12 Nonenforcement of IPR Laws Problematic non enforcement, philosophical antipathy to IPR. However this restricted technology transfer and development so countries ultimately signed TRIPS.

13. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 13 Nonenforcement of IPR Laws Piracy. Motion Pictures, Music. 2007—US filed two complaints with WTO against China for “unfair trade practices” centering on China’s legal deficiencies. Walt Disney Co. v. Beijing Publishing Press : Beijing court ordered an end to printing and payment of small fine plus attorney’s fees. A symbolic victory

14. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 14 Mechanics of IPR Transfer Regulations Prior Approval Schemes. Notification-Registration Schemes. Risks?

15. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 15 The Gray Market Licensor sells to licensee who sells to buyer who reimports to compete with original licensor. Stimulated by international currency fluctuations. Resolution of the Dispute: K Mart Corp. v. Cartier Inc. (US Supreme Court allowed gray market imports as long as the foreign manufacturer and the domestic trademark owner were subject to common control. Who Benefits with Gray Market?

16. Copyright © 2009 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 16 Franchising: International Licensing Pitfalls Duration. Royalty. Trademark Protection. Competition Laws. Tied Purchase. Geographic Exclusivity. Repatriation. Counter Trade. Tax Laws. Language Problems. Disclosure.