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Short Form IP Licences – What are they and why do you need one?

What is a short form IP licence?

A short form IP licence is exactly what it sounds like – it is an agreement which does not incorporate the full range of clauses that would normally be included in an IP licence. Particular clauses are shortened or simply removed altogether. For example, the standard boiler plate section that lawyers usually insist on including in every agreement (for good reason I’d like to protest in our defence!) is omitted and commercially sensitive terms are stripped from the document. The result is normally the bare bones of what you might consider to be a licence, setting out details of the parties, what is being licenced and then referring you to the main licence agreement for pretty much everything else.

Why might you need one?

All well and good I hear you say, but what’s the point of a shorter licence if we already have the main licence agreement in place? Well, the answer is registration, or ‘recordal’ if you want to use the fancy legal term. Although there is no statutory requirement that licences should be registered, registration can give some significant advantages to licensees that it is important to consider – and you want to be able to benefit from these without publicising to the world (particularly your competitors) the commercial terms of your agreement. In such circumstances, a short form licence can be recorded in place of the full agreement, providing the licencee with the advantages of registration, whilst protecting the confidentiality of the parties’ commercial arrangement.

What are the benefits of registration?

The main advantage of registration is protection – it puts third parties on notice of your licence. This ensures that any third party (e.g. assignee or licensee) who subsequently acquires rights in the subject matter of the licence will be bound by your interest. In other words, it gives constructive notice of your rights so that they cannot argue they were not aware of your licence. If you don’t register, then such third parties will not be required to honour the terms of your licence unless they had actual knowledge of it.

The second benefit relates to infringement proceedings. Normally the only person authorised to bring such proceedings against a third party is the registered proprietor – but the main exception to this is an exclusive licensee, who usually has rights and remedies concurrent with that of the owner. Registration provides key benefits to the licensee in such circumstances, such as providing an easy way of establishing that they are entitled to bring proceedings. In addition, the licensee cannot recover costs or expenses unless (yes, you’ve guessed it), the licence has been registered. This normally needs to be done within a period of six months from the date the licence was granted.

A final point, from a slightly more commercial perspective, is that registration can be useful simply to provide a level of comfort to prospective business partners that you are actually entitled to grant the rights that you claim – which can have the effect of making the subsequent transaction process run more smoothly.

If you have any questions or comments on this blog, please do get in touch by clicking the link below.

https://mbmcommercial.co.uk/sarah-cashmore.html

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