TECHNOLOGY TRANSFER
law, and the tribunal for dispute settlement. In Hungary, alternative dispute resolution (ADR) procedures are less frequent than in the US; out of court proceedings are mainly resolved in the framework of arbitration. Te arbitration tribunal should be specified in the licence agreement if such a dispute resolution is defined.
Another important issue that can generate differences between the parties is the amount of royalties, the conditions on minimum royalties in the case of exclusive rights, when they should be paid and how they are calculated. Tis matter requires increased attention and care from both parties while drawing up the terms of a licence.
Another important component is the finding of an efficient way for the licensor to check and supervise the calculation of royalties by the licensee.
trademark, or mixed agreements.
Although the law suggests that it is the task of the licensor to maintain its IP rights, in practice, and especially in the case of exclusive licences, this is the burden of the licensee.
• Te licence agreement should have an expiry date, because the term of a trademark is unlimited. Te licence agreement does not become ineffective or expire when the term of the trademark is renewed.
Tere are common rules for patent and trademark licences and for technology know-how based on unfair competition law, but upon certain conditions these licences are exempted from requesting individual authorisation by the Competition Office. Tese special rules are governed by the corresponding EU directive (772/2004 Commission Regulation), and there are national Hungarian laws that further specify what is permitted and what is not. As a rule of thumb, it is not permitted to fix prices, exclude competitors, prohibit the licensee from doing its own research and developments and invoke territorial limitation within the uniform EU market.
Practical considerations
Tere are very few pure patent licences; in everyday practice they are usually combined, ie, patent and know-how, or know-how and
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Furthermore, in the case of patent licences, the parties should decide about what to do when the patent is attacked in one, or more, countries— who will have the duty of paying the costs for such procedures or, if they share the costs, what will be the proportion. Te same applies for enforcement proceedings, where not only the procedural costs but also the share of the monetary compensation should be decided.
It is important to note that if there is a patent or trademark infringement and damages are awarded against the licensee, and the owner of the right sues, then the damages on the licensee’s side can be taken into account in the case if the licence has been recorded. Tis is a further reason why it is worthwhile to register a licence.
In the case of mixed licences (IP rights plus know- how), the parties should agree on what happens if a patent is nullified or limited in scope. Te licensee may have the right to terminate the agreement, but if it is still interested, then the parties have to agree on a decreased royalty payable based on the know-how only. Also, in pure know-how cases, the term of a licence agreement is shorter than for patent licences: generally, not more than 10 years.
An important part of these agreements is the determination of how disputes will be resolved. Tis can happen by choosing the applicable
World Intellectual Property Review Annual 2012 99
Tere are numerous other issues which should be taken into account when concluding a licence agreement, but these do not differ too much from similar agreements in the US. n
Michael Lantos is deputy managing partner at Danubia Law Office LLC. He can be contacted at:
lantos@danubia.hu
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