Licensing and Purchasing IP – Issues


The value of some types of Intellectual Property (IP) right can be extremely high. Indeed, there are some companies that are in business purely as licensors of IP rights to third parties. When IP is purchased, the full rights are generally transferred to a third party, whereas a licence grants limited rights to a third party for certain purposes and/or for a specified period of time.
If you use someone else’s IP without appropriate permission, this is usually an infringement of their rights. The IP owner can take legal action against you in order to recover damages for the harm caused to their business.
The terms under which you agree to sell or license your IP will be subject to negotiation and will be contained within a licence agreement or contract of sale. However, there are general considerations that apply to all IP transactions.
If your patent has a ‘licence of right’ entry in the register, it is in effect open to anyone to use it. This means that there is no requirement for anyone to purchase a licence or obtain permission from you to be able to use it. Equally, you have the right to use other people’s patents if the register entry shows that there is a licence of right. 
Once you have bought a patent (known as ‘assignment’), it is worth informing the UK IP Office (UKIPO) about the transaction so that the change of ownership is reflected in the patent register. You should also register a licence with the UKIPO.
Trade Marks
It is very important that you inform the UKIPO when you acquire a trade mark from someone else, for example as a result of a company merger. In the event that you grant, or are granted, permission to use a trade mark by way of a licence, for example as part of a franchise business, this should also be recorded with the UKIPO, as well as when the licence expires. Either party can inform the UKIPO.
If you are purchasing or licensing a design from someone, make sure that it has been registered with the UKIPO before entering into negotiations. Although in theory designs can be bought and sold regardless of whether they are registered designs or unregistered (design rights), it is harder to sell a design right if it is unregistered. Both ownership and the fact that the design has not been copied must be proven by the owner, which can be costly and time consuming. Again, it is vital that the UKIPO is kept informed as to any sale or licence arrangement in relation to a registered design.
In certain situations you do not have to obtain permission from the copyright owner before making use of their work. However, these are limited and if in doubt you should always check whether your intended use constitutes an infringement. In the event that you are using the copyright within an exception to the requirement to obtain permission, you must acknowledge the copyright owner sufficiently.

It is always worth checking the lifetime of the copyright as this varies depending on the type of work. It is possible to buy or license the rights to a copyright work. However, difficulties in obtaining the requisite permission can sometimes arise if the owner is difficult to locate. 

If you are considering selling, purchasing or licensing a form of IP, or if someone else is using your IP without your permission, contact us for advice on how to proceed.

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