international trade mark licensing · 2020-04-14 · taking your brand global international trade...
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© Copyright 2015 by K&L Gates LLP. All rights reserved.
Taking Your Brand Global
International Trade Mark Licensing
Arthur Artinian, Partner, Intellectual Property, K&L Gates London
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Arthur Artinian
Partner
London
T +44 (0)20 7360 8207
F +44 (0)20 7648 9001
Welcome
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Overview
� Business conversations to drive international licensing projects
� Key issues for licensing across multiple jurisdictions
� Key antitrust considerations
� Managing disputes and enforcement
� Licence formalities, registration requirements and risks
� Red flags - when to engage local counsel and specialists
� Future-proofing brand licences
� adapting key provisions for compliance with international trade mark laws
� giving your standard form licence agreements an “international refresh”
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International licensing can take many forms
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• Licence• Franchise, Joint Venture or partnership
Entering new markets
• Product or service diversification• Merchandising
Brand extensions
• Manufacturing, distribution• Outsourcing, service delivery
Business operations
• Tax and transfer pricing • Restructuring
International structuring
• Settlement and co-existence• Cross-licensing
Disputes
• Acquisition or disposal of business• Brand “splitting”
Business transactions
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International licensing is complex
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Contract
Dispute resolution
Regulation
Tax
Antitrust
Trade MarkPatents
& Know How
CopyrightDesignsGoodwill & related
rights
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Key business conversations
� Consult sales, marketing, product development, PR, digital, accounting, management and/or legal representatives
� Where are we taking the brand? What are our future plans?
� Is it a franchise or a licence?
� Are we granting exclusive rights – e.g. by territory, sector?
� What type of royalty or fee structure do we require?
� Legal and commercial diligence on licensee
� Legal and commercial on local regulatory framework
� How is our brand protected locally?
� registered IP rights, unregistered rights
� localised branding: translations, transliterations, character marks, sub-brands
� domain names and social media accounts and notifications
� How will we manage digital and social media presence?
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"ROW" Considerations
� Nomenclature� Trade mark, Trademark, Trade-mark
� Licence, License
� Exclusive, sole, non-exclusive, sole and exclusive, irrevocable
� Indemnify
� Territory� Madrid trade marks
� Regional trade marks (CTM, Benelux, OAPI, Eurasian TM)
� EU unitary rights – current and future member states?
� Future markets - diligence? who assumes risk?
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� Rights within territory � Each relevant act of infringement� Ability to permit third parties to do those acts� All goods and services or only some?
� Rights outside territory � Import, export� Goods in transit� Manufacturing and distribution rights
� Rights not restricted by territory� Internet� Digital and social media� Generic top level domains
Territorial ConsiderationsGlobal website landing pages
Geoblocking
Presence on auction and
retail platforms
Country specific social
media presence
Division of domain names
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"ROW" Considerations
� Cultural and linguistic context� Controls on translations, transliterations, character marks
� Localised branding, sub-brands
� Regulatory restrictions e.g. labelling and advertising regulation
� Term and renewal� Long term or perpetual agreements can be problematic
� Tacit or automatic renewal provisions (e.g. France)
� Enforcement rights � Additional licensee rights under domestic legislation
(e.g. UK, Australia)
� Requirements for TM owner to be party to any proceedings
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� Quality control� Sensible level of control over licensee uses� Prior approval rights for every use not necessary� Explicit intention to exercise control over quality
� Dispute resolution and governing law � Mechanism: arbitration, mediation, court, bespoke?� Location: neutral territory?� Agreed exceptions to dispute mechanism (e.g. injunctive relief)
� Tax� Transfer pricing and tax risks where royalties paid across borders� Differing approaches to withholding tax under domestic legislation� Is VAT payable and included in quoted fees, royalties?� Who bears risk for withholding tax? Who bears currency risk?
"ROW" Considerations
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Competition / Antitrust considerations
� Exclusivity� What justification exists for exclusivity?
� Problematic where restrictions between EU member states
� Permission for passive sales
� Restrictions and prohibitions� No-challenge clauses
� Minimum sales prices or price fixing
� Non-competition outside context of IP rights
� Termination rights� Termination right based on challenging validity of IP rights
in non-exclusive licences problematic
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� Licence might need to be:
� In writing
� Signed by Licensor
� Signed by Licensee
� Notarised
� Legalised
� Apostilled
� Approved by a regulatory body or authority
� Compliant with mandatory provisions on domestic rights or assets
� Compliant with requirements to adequately define the licensed property (e.g. full trade mark details in schedules, IR vs national designations)
� Registered or recorded on domestic trade mark register
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Licence formalities
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Registration of licences and interests
� Validity of licence and/or trade mark dependant on registration� Use by licensee only recognised if licence registered
(e.g. to defeat a non-use action)� Licence involves national rights which cannot legally be
licensed without registration
� Registration confers benefits with respect to enfor cement � Only registered licence can be relied on in domestic proceedings� Registered licence effective against innocent third party conflicting
interests (e.g. EU and UK)� If registered within a prescribed period, licensee can claim costs of
proceedings relating to infringements before registration (e.g. UK)
� Public notification of rights and deterrent
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Registration of licences and interests
� Registration confers benefits with respect to local legal and regulatory issues� Remittance of royalties abroad facilitated by registration
(e.g. China, Brazil, Japan)� Prima facie evidence of a valid licence (e.g. South Africa)� Domestic permits, licences and funding facilitated� Tax benefits
� Registration not possible or no benefits of registr ation
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International registration strategy – is it worth th e expense?
Dependent on a range of factors:
� Number of RED countries� Longer term or perpetual� Relationship between the parties � Nature of trade mark rights� Presence in, and familiarity with, licensed territories� Practicality of enforcement and local monitoring
Registration of licences and interests
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� National vs Madrid Protocol registration� Germany, Australia and New Zealand excluded� National recordal required in China, Colombia, Georgia, Greece, India, Japan,
Kyrgyzstan, Lithuania, Mexico, South Korea, Moldova, Russian Federation, Singapore and OAPI
� Key licence provisions� Licensor required to register or assist with registration?� Who controls and pays for recordal process?� Who prepares recordal documents?� Agreed form recordal licence attached?� If there is a choice to register or if registration would benefit the Licensee, can
Licensee require registration?� What is procedure for removing registrations on expiry or termination of licence?� Interim licence to use until registration achieved?
Registration of licences and interests
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Red flags
� Licence grant
� Buzz words – exclusive, sole, non-exclusive, irrevocable, indemnify
� Legal status of rights – pending applications licensed?
� Rights within and outside territory or channels
� Perpetual / surviving obligations
� Indemnification provisions (e.g. loss of profits, excluded liability)
� Termination triggers for challenging IP rights
� No-challenge, non-compete provisions
� Price controls
� Territorial or channel-based restrictions
� Current and future registration and enforcement obligations
� Anti-bribery, FCPA compliance, data protection
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Standard form licence agreements
� Define or spell out key concepts
� “Exclusive means to the exclusion of all other persons, including the Licensor”
� “Material breach includes any breach of clauses 5, 7, 8 and 10.”
� “Customary Trade Expenses means…” etc
� Minimise reliance on domestic contractual concepts
� Reasonable endeavours, best endeavours, best efforts, best commercial efforts
� Include obligations on licensor or licensee to co-operate in good faith with respect to unexpected domestic issues
� Build procedures for expansion, registration of new rights, business planning
� Use “to the extent permitted by applicable law”
� Use warranties, representations and acknowledgements
� Include severability provisions
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Business
In house
counsel
Global
counsel
BusinessIn house
counsel
Local counsel
Alternative approach to licensing projects
Local counsel
Local counsel
Local counsel
Local counsel
Local counsel
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Questions
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