License, franchise and distribution agreements
We offer you advice and drafting of contracts in connection with the development, protection and commercialization of intellectual property through our contract desk.
Research and development cooperation agreements are about the regulation of technical cooperation in the development of new products and the ownership of the development results and any patents. On the one hand, it must be ensured that expert and experiential knowledge which flows into the development results and all property rights can continue to be used unhindered by the respective creators. On the other hand, it is central that clarity prevails about which joint development results are attributed to the client and which to the developer, e.g., (technical) university. If you want to finance a university project through Innosuisse, we can make the necessary clarifications and provide you with support. In certain circumstances in the context of a quotation, there are also commonly problems in practice when the supplier or mold maker develops a product for the customer free of charge or at a reduced cost, and there is no written record of how long the customer remains bound as a purchaser of the supplier's products.
License contracts must be designed win-win, otherwise they have a short life and trouble is inevitable. When drafting the contract, care should be taken that the risks should be imposed on the party that can better control it. For example, this principle may offer guidance on the contract points of "infringement of the licensed patent by a third party” ("unlicensed competition") or "infringement of older, previously unknown third-party patents” when negotiating which party has the right or duty to file a lawsuit before a competent court. Professional databases and sometimes court judgments can be used for the determination of the amount of the royalty rate.
From a legal perspective, the granting of intangible property rights is also central to franchise agreements. Mostly, it is the trademark, partly in combination with other property rights (patents, design, copyrights). In contrast to license agreements, a business concept is licensed in franchising, e.g., how a business idea can be multiplied (“leverage”) as quickly as possible under a single market presence and expanded geographically. Known examples are McDonald's, Starbucks, hairdressing and cosmetics chains, etc.
Distribution contracts do not license patents. The distributor buys goods from the manufacturer that may be patented. Legally, however, this is not important since the patent rights are exhausted when the goods are placed on the market (sold to the distributor), i.e., they can no longer be asserted by the distributor. Even without patent protection, in the vast majority of cases, the distributor is looking for exclusivity in return for market development, for which he usually has to make large investments. The exclusivity must therefore be ensured without patent protection, i.e., purely by contract. One might think of an export ban at the expense of a neighboring distributor in another geographic market, so that the exclusivity in its own market is not undermined by uncontrolled sales from the other market. At this point, competition law comes into play, which sometimes severely restricts contractual freedom of design. For example, it is only permissible to prevent as exclusively as possible active advertising measures of a neighboring distributor in the distribution market which is to be protected, but not passive sales to purchasers from this market. Bypassing the rules of competitive law may result in high fines.
Dr. iur. HSG
(Universität St. Gallen)
Dr. iur., LL.M., Attorney at Law