LICENSING CHALLENGES
failed to pay any of the payments or royalties due,
then the licensor reserved the right cancel the licence.
‘Interviewing’ various employees of the licensee on a semi-yearly/yearly basis in Taiwan made it possible
to verify information given orally
which contradicted the reported sales numbers substantially. Massive under-reporting seemed to have been the case.
Despite the audit provision in the licence
agreement, during those maintenance visits to the licensee in Taiwan, the goal was to gather verifiable data informally. Obviously,
this can
work only if the licensee is cooperative. Even though the
licensee repeatedly promised to
provide data, the information was never given to the licensor.
As a result, an official audit was requested in accordance with the licence agreement. Te audit began with two auditors, both fluent in English. Teir report was discouraging. Despite the fact that the auditors were allowed to enter the facility of the licensee in Taiwan, the only information provided to them was the known royalty
reports and the licence agreement. Countless excuses were made by the licensee.
Even though the auditors had provided a specific list of documents they needed to review before the visit, they were sent back empty-handed.
In a second audit attempt the auditors were,
once again, not provided with the information needed, including access to the sales account, sales
invoices, purchase orders, documents and
by serial numbers, bank accounts in general, additional
computer data. sales orders
With the complaint filed and served to the licensee
Represented
(defendant), by
a Chicago
litigation commenced. law firm,
the
Taiwanese defendant tried to dismiss the suit for lack of jurisdiction, despite the fact that the licensing agreement clearly and unambiguously stated the venue. To the plaintiff’s counsel
surprise, for the defendant withdrew the
representation. Te Taiwanese defendant then disappeared, and faced an order of default and damages. Te defendant was in default for failing to appear, answer or otherwise plead.
BEST Rechtsanwälte / Attorneys
R Sechtsanwälte Attorneys
BE T
BEST Rechtsanwälte was established in 1998. Located in Frankfurt am Main, Germany, it is a boutique law firm specialised in Intellectual Property Law. Its two partners, both having worked in industry, as attorneys and in other positions for many years, have a strong back- ground in this field. Together with further experienced attorneys and highly trained and motivated paralegals and support staff, the firm is well established to handle large quantities of work while ensuring highest quality standards.
BEST acts on behalf of large corporate clients and SMEs from various countries and numerous sectors of industry and commerce as well as on behalf of law firms based outside Germany, whose clients BEST Rechtsanwälte represents before the German courts and the German Patent and Trademark Office or in matters involving Community Trademarks and Designs.
BEST provides strategic consulting in trademark, design and domain matters and the complete spectrum of services in these fields, in- cluding clearance, prosecution, defence and litigation of clients’ rights, and finds cost-effective and efficient answers to clients’ questions.
BEST also protects and defends clients’ interests on issues of unfair competition, advertising, and domains, from clearance and registra- tion to UDRP and ADR proceedings, recovery, watching, social media and data protection issues.
For larger clients all of these services can be provided on the basis of an Agreement at an annual flat rate. We offer the best possible service to our clients at competitive rates. This is where our industry experience meets client expectations.
BEST Rechtsanwälte Industriepark Höchst / E 416, 65926 Frankfurt am Main, Germany Tel +49 69 305 6057, Fax +49 69 305 16415, Web
www.best-ip.eu, Email
ip@best-ip.eu
26 World Intellectual Property Review Annual 2012
www.worldipreview.com to
“IT WAS POSSIBLE TO ESTABLISH, THROUGH WITNESS AFFIDAVITS, THAT SALES NUMBERS HAD BEEN PROVIDED TO THE PLAINTIFF. THIS TURNED OUT TO BE SUFFICIENT PROOF FOR THE COURT TO ASSESS DAMAGES.”
Blocking the auditors constituted a clear breach of
the agreement. Terefore, despite many
attempts to resolve the issue amicably the only option leſt had to be pursued: filing a lawsuit.
According to the complaint, the Taiwanese
licensee had not properly reported or paid royalties
the licensee to the licensor, which constituted a
material breach of the agreement. Te licensor claimed that
refused to allow
independent auditors to carry out an audit of the licensee’s records in order to ensure that appropriate royalties had been paid. Te licensing company was seeking damages including the royalties due under interest and legal costs.
the licence agreement,
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