IP Clauses in Licensing Agreements

Case - Larkden Pty Limited -v- Lloyd Energy Systems Pty Limited [2011] NSWSC 268 

One aspect of this case deals with the powers of an arbitrator as opposed to the Commissioner of Patents and the Federal Court.  More specifically, an arbitrator can resolve a dispute between a licensor and a licensee claiming rights to an invention provided the dispute is with respect to the licensing agreement itself and does not impinge on third party rights.

This kind of dispute emphasises the need for a licensing agreement to do more than just simply state for example that the licensor shall own intellectual property relating to improvements or developments to the invention that is the subject of the agreement.

My recommendation is that the agreement contains clauses that allow for the licensor to be kept up to date with developments and improvements before they are made public.

The agreement should allow the licensor the option to register any intellectual property in its own name related to the developments and improvements.

The agreement should also obligate the licensee to execute any documents or take any further steps which may be necessary to secure the registration of that intellectual property in the name of the licensor, including, but not limited to, assigning that intellectual property to the licensor.  This is particularly important for those jurisdictions, such as the United States, where patent applications must be filed in the name/s of the inventor/s.


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