ELZABURU has had the pleasure of working together with the publisher Thomson-Reuters Aranzadi on Fashion Law, a pioneering work in Spain on the subject of fashion law, which was presented on 16 April.
In these short weekly summaries, the professionals at ELZABURU who participated in the work offer us a brief outline of their contributions:Licensing
A licence is an instrument available to holders of intangible assets that enables them to permit third parties to use their assets subject to a series of conditions. Unlike an assignment, a licence does not transfer ownership of the asset but simply grants an opportunity to use it in a given territory for a limited period of time.
Licences enable licensors to exploit assets in territories or markets which might otherwise hold out little interest for them or which they might be unable to enter on their own.
It should be noted that licences may be issued both for rights that depend on registration at a patent and trade mark office and for rights that arise without formal registration, such as copyright or trade secrets, though in this last-mentioned case it would be wise to put in place procedures to protect the asset and systems for monitoring its use. Various intangible assets may be licensed in a single agreement, a common practice in franchising agreements, in which trade marks, designs, know-how, and the like may all be licensed.
The basic instrument used to issue licences is the licence agreement, which can be worded by the parties to stipulate whatever terms they deem suitable as a framework for the licence. In any event, licence agreements ordinarily contain a series of clauses aimed at consolidating and enhancing the consistency of the contract.
Thus, clauses specifying the object, duration, and territorial extent of the licence help shape the content of the licence.
It is advisable to include both an intellectual property clause (specifying the owner of the assets, which party will take charge of their defence in the event of third-party infringement, and whether sublicensing is permissible as well as prohibiting registration by the licensee) and a supervision and audit clause (setting up mechanisms for monitoring use of the assets by the licensee, compliance with the terms of the licence, and proper reporting of the profits obtained through use of the assets) in the interest of further protecting the asset.
In terms of payment for the licence, where a consideration changes hands, the arrangements most commonly stipulated basically number four:
- (i) payment of a fixed amount for the entire lifetime of the licence.
- (ii) payment of an amount for the licence each year.
- (iii) payment of a percentage of the profits earned through commercial use of the asset concerned.
- (iv) payment of an initial fee plus a percentage of the profits obtained. Any combination of these arrangements is of course feasible, or any other scheme agreeable to the parties may be used.
Other clauses – such as early termination or applicable law and jurisdiction – are essential to ensure the legal certainty of the agreement and avert further difficulties in the event of a dispute.
Lastly, it should be noted that for licence agreements to have effect vis-à-vis third parties, they must be recorded on the relevant registers, such as registers kept by industrial property offices (the Spanish PTO) or intellectual property registers.Author: Martín Bello y Alba María López
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Blog entries in the series Fashion Law:
1.Trademark protection in the fashion sector (23.04.2018)
2.Design protection in the fashion sector (30.04.2018)
3.Patent protection in the fashion sector (07.05.2018)
4.Protection of fashion through copyright (21.05.2018)
5. Image rights in the fashion sector (28.05.2018)
6.Fashion Law. Data Fashion (04.06.2018)
7.Counterfeiting in the fashion sector (11.06.2018)
8.Exhaustion of rights in the fashion sector (18.06.2018)
9.Corporate reputation in the fashion sector (25.06.2018)
10. Protection of the commercial imagen of a fashion brand (04.07.2018)
11. Websites, Apps & Social Networks (13.07.2018)
12. Valuation of intangible assets (17.07.2018)
13. Licensing (06.09.2018)