International License Contract-what is international license contract?
What is international licensing contracts?
International licensing contracts known as "International License Agreement" means located between parties in different countries to use the right technology for the purpose of transferring the contract. "License contract" in the word "license" is different from the executive is for administrative purposes, the merchandise import and export permits issued license.
The main object of the contract permit the right to use the technology, specifically, that the patent rights, trademark rights and proprietary technology, the right to use.
International licensing contract:
International licensing contracts and other international trade contracts, its structure is divided into the first clause of the main terms and provisions of the tail.
(A) the first international license contract terms1 Name of contract terms. The name of the main terms of the contract is to show that the contract name, type and characteristics.
(2) the name and address of the terms of the parties. The name of the parties should be clearly written, its significance is that different companies take different debt obligations, such as the Corporation can only assume the registered capital of foreign debt, unlimited liability company to unlimited liability for debts. The legal address of the parties is also very important, it is not only technical information and documents sent to the address, and contract disputes in the event of arbitration or litigation to determine the location based.
3 Date and place of contract terms. Date and place of signing the contract clearly is important. If the contract from the contract within a certain period from the date of delivery of technical information, then clearly the date of the contract, meaning it can not be ignored. Contract law applies in determining the location also has an important role.
4 In view of the terms. In view of the terms refers to the beginning of the contract that the parties contracted for intent, purpose and principles of contract terms. Usually due to the wording of the "view" at the beginning, so called in view of provisions. In view of how to interpret the contract in terms of the specific terms of mental guidance. Although the specific terms of the contract should be interpreted in accordance with the law and international practice, but the guiding principles set forth in the contract role, they can not be ignored.
5 defined terms. Terms defined in the contract refers to repeated use, easy to confuse or key term, the meaning of the term to make clear and specific terms of the provisions. As in the international technology trade, the parties divided in different countries and regions, not only exists between the language barrier, there are also differences in the legal system, a number of countries in technical and legal terms are often not uniform interpretation . In order to reduce differences, it is necessary to define the terms. In general terms in the definition need to define the words are: ① the subject of important contract terms and terminology, such as patents, proprietary technology, trademarks, etc.; ② national law or practice have different understanding or ambiguous and the important terms and terminology, If the net sales price, sliding formula, commission rate, etc.; ③ important professional technical terminology; ④ contract many times, need to be simplified terms and terminology.
(B) the main provisions of international licensing contracts1 terms of the contract project. Terms of the contract project, including the object of the contract, scope of rights, and the nature of the region. Contract object that is the subject of international licensing contracts. If that is the subject of a patent, shall be specified based on the patented technology to obtain and provide the necessary information. If it is a proprietary technology licensing, proprietary technology should be stated in the relevant documents and information. If you are a trademark licensing, trademark should be accompanied by miniatures.
Scope of rights is an international technology license contract the right to use the range. There are several possible using a range of technologies, including technology use rights, manufacturing rights, marketing rights and the use of these three aspects of time privileges scope and geographic scope. Use right is granted to the transferee to the transferor for a particular purpose of use of their right to transfer of technology, it is a basic authorization. Manufacturing rights granted to the transferor is a transferee of a technology to use its technology to produce the right product, it is most required by the transferee a right. Marketing rights granted to the transferor is a transferee in a specific range of marketing technology products it produces the right.
Geographical scope of the transferor is the transferee to use its technology to allow the particular region. The geographical scope of the general right to use narrow, usually limited to contract factories. The right to use an important issue to be resolved is the scope of use of technology. Sometimes a technology can have several different uses, or can produce a range of products. If you limit the scope of its use of technology, would restrict the transferee take full advantage of the technology's value in use, so some of the production of such varieties in developing countries to limit the terms as restrictive business practices, not allowed to set into the terms of the contract . The geographical scope of the manufacturing rights are usually limited to contract factories. Generally allowed in the transferee country introduction of technology, contract manufactured products. Right to sell a wide geographical area, involving products of domestic and export. Transferee shall have the right general in the country within the geographical scope of their sales. The right to sell the key issue is the geographical scope of the contract the right to export products and export of regional issues. At the same time, the contract should be clearly defined in the use of the technology manufacturing and production technology products which terms.
Time frame is allowed to the transferor in the transferee how long to use its technology or rights. General patent and trademark licensing time frame consistent with the contract is valid, but can not exceed the validity of their rights.
The nature of authority, that is the nature of the transfer, the transferor is the transferee of the rights granted exclusive or exclusive, is transferable or not transferable. International licensing contracts which should be clearly defined.
(2) the contract price and payment terms. Price and payment terms are an important part of international licensing contracts. The terms include the method of valuation, contract amount, currency and payment method using the currency and so on.
International license contract valuation methods usually have three types: turnkey price, commission prices, entry fees and royalties, a combination of pricing. Turnkey price is a fixed pricing, the transferor and the transferee for the transfer of technology in the signing of the contract price negotiated lump-sum amount, then the transferee pay a lump sum or in installments. This payment method is mainly applied to finally do have the quality assurance of international technology licensing contracts. The payment to the transferee is a disadvantage because he was borrowing large sums of money to the bank to pay large sums of interest. However, if the technology really advanced, affordable, early production, the profit is very handsome.
Commission price refers to the project is completed, the contract production quantity, sales price, or extract a certain percentage of profits the cost of technology transfer as remuneration paid to the transferor a continuous schedule. This is a sliding pricing, international technology transfer is a way to use more.
Production by commission, under the contract is in accordance with technology manufactured products, the cost of production per unit price of commission amount, regardless of the product cost and sales. This calculation method of the transferee is clearly a disadvantage.
Sales price by the commission, usually calculated by two criteria: First, based on gross sales price of royalties; the second is based on net sales price of royalties. The former is calculated according to the invoice, which is based on gross sales price minus factors unrelated to the technology and the increased value of the royalties.
Calculation of royalties based on sales profits, is by the transferee under the contract from the sale of technology products as a percentage of profits to calculate royalties. If the transferee is not from a technical product high profits, then the transferor will not get royalties. This calculation method of the transferor, it is not guaranteed.
Entry fees and royalties combination of pricing, is the transferee or in the contract after the first batch of technical information received after a certain time within which the transferor to pay an agreed amount, and then required to pay royalties. First pay as entry fee or initial fee. Entry fee is usually only a small part of the technology use fee, the transferor is mainly used to compensate the direct costs of technology transfer expenses.
About the royalty payment, there are three: ① Technical delivery payment. The method is divided into pre-paid contract price, after the payment and delivery of technical data quality assurance contract after the end of three payments for; ② the project progress payments. It is the performance of the contract is divided into several phases, each phase of the actual completion of work according to payment; ③ installments. The payment method, also known as milestone payments, which total contract price is divided into several equal parts, starting from the commencement of the contract, paid at regular intervals once each pay the same proportion.
3 terms of technical improvements and technical services. As the international license contract performance period is longer, and science and technology is constantly moving forward in the international licensing contract is in force, regardless of the transferor or the transferee of the technology are likely to improve or develop. For the improvement and development of new technology must be provided in the contract. In the international licensing contract, the improvement and development of technology specifically the following two main aspects: one is to improve the ownership and development of technology; the other hand, should be clearly communicate the transferor and the transferee or the development of technology to improve the conditions. According to international practice, on the improvement or development of technology ownership attribution, generally in accordance with "who improved, who attribution" principle, namely the improvement or development of technology to improve or develop technology vested in the party. In the exchange and use of technology, improvement or development conditions, the general should follow the "reciprocity" principle, exchange or compensation delivery.
In addition, international licensing contract, but also provides a variety of technical services, content, such as technical training, design and engineering services, marketing and business services, management services, research and development services. These services can be paid, it can be free of charge, as required in the contract should be made clear and detailed requirements.
4 guarantee and warranty. Assurance and security has two aspects: First, technical assurance and security; the second is the guarantee of rights and guarantees. Of technical assurance and security, including technical information and technology to ensure efficiency and security guarantees and warranties. Transferor shall be stipulated in the contract in a timely manner to provide the relevant technical information to the transferee, and to ensure that the information provided is complete, reliable and correct, and the transfer of the Founder in the use of the latest information; guarantee the provision of technical Through the proper use of technology to achieve the contract targets and economic benefits. In order to meet the conditions of production the transferee, the transferor to the transferee an obligation to assist in the technical data necessary amendments and improvements, and to ensure that manufacturing and transfer of technology products have provided samples of the same quality.
Assurance and guarantee of rights also includes two aspects: First, shall guarantee the transfer of patented technology in the patent is in force, and not expired; he provides proprietary technology is not public, the general public are not easy to grasp. Second, the transfer shall provide security technology to its full ownership, free from any third party's allegations; if the third person accused of using the technology as a tort, the transferor shall bear full legal responsibility.
5 breach of contract remedies provisions. Breach of contract relief provisions generally include the transferor and transferee relief for breach of default remedies in two ways. Remedies on the transferee. Party refused to provide for the transfer of technical information required by the contract, technical services or technical training in fundamental breach of contract, the transferee the right to terminate the contract, requiring the transferor to refund the paid transfer fees, according to the contract to pay liquidated damages or compensation for actual losses. If the transferor fails in accordance with the time stipulated in the contract to provide technical information, may request the transferor to the transferee to pay a certain percentage of late fines. If the technology transfer for violating the warranty obligations, failed to meet the technology provided the technical standards stipulated in the contract, the contract according to the transfer of technology or product-specific circumstances, to determine the different compensation schemes. If the transfer of security responsibility for violating the right to make the transferee has been subject to third-party infringement or alleged infringement of third-party interference, the transfer shall be obliged to take measures to eliminate interference. If the alleged infringement was established, the transferor shall bear legal liability arising from, the transferee shall have the right to terminate the contract.
Remedies on the transfer side. Do not pay the transferee, the transferor the right to stop or terminate the license to fulfill its contractual obligations. Transferee delay payment, transfer only claim a certain percentage of late payment penalties, and may require transfer to meet their obligation to postpone the deadline. Transferee violating the license terms, the use of technology to expand the scope of the transferor to the transferee the right to request to stop the violations and pay a certain amount of compensation until the termination of the contract. Obligation of confidentiality breach of contract, resulting in the transferor's technical secrets leaked, the transferor transferee the right to request an immediate cessation of the breach and compensate the transferor in accordance with the contract the actual loss.
(C) the end of the international license contract terms:1 arbitration clause. General requirements of international licensing contract, the contracting parties in the performance of the contract, if a dispute should first be resolved through friendly consultations. Can not be resolved in a friendly consultation, can be settled by arbitration. Therefore, the contract should contain an arbitration clause, the arbitration institution, the place of arbitration, the arbitration rules and the validity of an arbitration award clearly defined. And on application of the law also made provision in the arbitration clause.
(2) force majeure clause. Contract, the parties may in the performance of the contract a force majeure event, the contract can not perform or can not fulfill all the time, so the contract should contain a force majeure clause. The terms of the range should be a force majeure event and the occurrence of force majeure, the parties should take important measures, clearly defined.
3 of the contract into effect, duration and termination provisions. The effective date of the contract should be clearly defined. Duration of the contract also requires consultation by the parties. Some countries have legal limits on the duration of the contract, but most state laws there is no age limit, before the expiry of the contract by the contracting parties of the application, you can extend the duration of the contract.
Termination of the contract should be clear in the contract, that contract in response to the reasons for termination of the contract, the conditions clearly defined.
International Classification of the license contract:
(A) divided by the specific object of the contract, international licensing contracts are divided into: patent licensing contracts; trademark licensing contracts; proprietary technology licensing contracts.
1, patent licensing contracts (Patent License Contract)
For example, foreign patents if not made in China or the parties reach an agreement with China that allows Chinese parties to use its patented technology, this patented product is not exported, this technique can not be exported, here's a real case:
Water gel explosives, the patent of the United States. Our technical staff access to information obtained in this patent disclosure materials. Thus closed-door study, decipher the secret of its technology to produce a qualified water gel explosives. A Hong Kong businessmen purchased the product. Do not know because of our U.S. patent protection in Hong Kong, the Hong Kong agreed to sell the product. In Tianjin after shipment, notify the patent owner was not allowed to sell. U.S. patent request in their asking price is high, but can not fulfill our contract with Hong Kong, had to cut prices drastically to Hong Kong in Hong Kong to pay costs of the patentee's patent. So our original international markets than many of the lowest selling price is now even lower, resulting in great losses. Therefore, manufacturers should develop our people set the United States patent license agreement before development and production. Otherwise, it is illegal.
2, the trademark licensing contract (Trade Mark License Contract)
That is to use the trademark under trademark and technology as a subject of the contract. International trade in permits, trademark license agreement contains certain technical trade content, trademark counterfeiting, generally can not achieve the quality standards of the original trademark.
In the international market, to create a brand trademark is not easy. Simple trademark license agreements are often small, and usually in the introduction of proprietary technology, combined with the introduction of the right to use the trademark. China's foreign trade business, simple to use and few other trademark cases, often in writing, under the trademark "Made in China" character, so that after the expiration of the contract, can not continue to use the foreign trade mark, the Chinese manufacturers will have a foothold.
3, the proprietary technology licensing contracts
In practice, in many cases proprietary technologies are used. Therefore, the introduction of the patented technology, with the introduction of proprietary technology. Patents tend to retain a key technology. With patent disclosure manual, does not make use of the technology people have successfully used. Therefore, only the introduction of proprietary technology, can we really need the advanced production technology, experience and knowledge to introduce to achieve the desired results.
(B) The licensee of the licensor's technology enjoyed by the exclusive right to use the degree and scope of the license can be divided into: an exclusive license agreement; exclusive license agreement, general license, exchange permit.
1, the exclusive licensing contract (Exclusive License Contract)
Exclusive licensing contract is the licensee's license agreement each other within a region and the effective period of the contract for the technology under license have the right to possession and use alone. In the case of signing this agreement, regardless of any third party or parties are not permitted in the license period, in the region to use the technology to manufacture or sell products, even though industrial property rights belong to the licensor. This contract will enable the transferee under the contract of technology products to monopolize the market, so the price is higher.
2, the exclusive licensing contract (Sole License Contract)
Exclusive licensing contract, also known as an exclusive license, the licensee is a contract within the region and the life of the contract, under the license the technology to enjoy the exclusive right to use the licensor during the contract period will not allow any third party has the right to use, but permits the parties themselves can use the technology in the region to manufacture or sell products. Because the contract by the licensee of the technology acquired exclusive license rights than the use of smaller, so the technology than the exclusive license to use lower paid.
3, the general license contract (Simple License Contract)
Its main feature is that third parties can obtain a permit under the right to use the technology, so it is in addition to the contracting parties agreed areas of technology under license have the right to use, the licensee has the right to license the contract under the right to use to buy the technology to a third party. The license prices are generally lower than the first two.
4, transferable license contract (Sub-License Contract)
Unlike the first three, witnesses can buy the technology under license or right to use the trademark right to use and then transferred to a third party. The re-transfer on the premise that the original sale by the consent of the witness. The third person was also known as transfer points for sale licensee.
5, licensing exchange contracts (Cross License)
Both sides can be equal to the value of technology, cross-technology two parties the right to use, therefore, the use of the license, the license can be more than five permission, the parties expressly agreed areas of responsibility and scope of rights.
Characteristics of international licensing contracts
1, the main body of the license contract, the transferor and transferee that the sub-offices in different countries. They may be natural, it can be legal, but the corporation is a common subject.
2, the object of the contract permits the use of intellectual property rights, and for moving across borders, from one country to another country.
3, the timing of licensing contracts and has a strong regional. The transfer of intellectual property licensing contracts and other intangible property rights, because the timing and regional intellectual property rights, making the licensing contract also has two features.
4, the timing of the license agreement is not strong, and complexity. Many are mixed agreement, or both in a subject other main subject of the transfer or sale of equipment and machinery, engineering, contracting, joint ventures, compensation trade, cooperative production, consulting services, etc. together.
5, licensing contracts are paid contract. Between governments, business to business or for some specific purpose, such as its intellectual property rights to use intangible property agreement signed free alienation, not an international license agreement.
