Are exclusive and non-exclusive licensees given different rights in respect of the enforcement of the licensed IP, and if so, how do those rights differ?
Intellectual Property (3rd edition)
There is no distinction between the rights of exclusive and non-exclusive licensees to request the patentee to institute infringement proceedings unless there are provisions to the contrary in the licence contract.
Where the patentee refuses or fails to institute infringement proceedings within three months from the receipt of the request, the licensee is able to institute the proceedings in his own name after notifying the patentee of his intention to do so. The patentee has the right to join in the proceedings.
There is no distinction between the rights of an exclusive and non-exclusive registered user. The registered user is entitled to call upon the registered proprietor to take proceedings for infringement of the trade mark, and if the registered proprietor refuses or neglects to do so within two months after being so called upon, the registered user may institute proceedings for infringement in his own name as if he were the registered proprietor and shall make the registered proprietor a defendant (subject to any agreement subsisting between the registered user of a trade mark and the registered proprietor of the trade mark).
Where the registered proprietor fails to exercise the rights that has been conferred to them by their registration to the prejudice of the registered user, the registered user may apply to Court for an order, including ordering the registered user be recorded as the registered proprietor of the trade mark via rectification of the Register.
There is no distinction between the rights of exclusive and non-exclusive licensees in respect of enforcement. Except against the copyright owner, the exclusive licensee shall have the same rights of action and be entitled to the same remedies as those available in a legal action brought by a copyright owner for infringement of copyright as if the licence had been an assignment.
Where an action for infringement of copyright is brought either by the copyright owner or the exclusive licensee, and the action relates to an infringement in respect of which they have concurrent rights of action under that section, he is not entitled, except with the leave of court, to proceed with the action unless the copyright owner or the licensee is joined as a plaintiff in the action or added as a defendant. An exclusive licensee however, may obtain an interlocutory injunction without having to join the copyright owner as a party in the application.
Where an action, in so far as it is brought by the copyright owner for infringement of copyright, relates to an infringement in respect of which the owner of the copyright and the exclusive licensee have concurrent rights of action, and an account of profits is directed to be taken in respect of that infringement, then subject to any agreement of which the court is aware whereby the application of those profits is determined as between the owner of the copyright and the exclusive licensee, the court shall apportion the profits between them as the court may consider just.
Where an exclusive or non-exclusive licensee wants to institute any infringement proceedings, the licensee must prove that they had made a prior request to the registered owner to institute proceedings for the infringement complained of by him and that the registered owner had refused or failed to institute the proceedings within three months from the receipt of the request. The registered owner however still has the right to join the proceedings.
There are no specific rights given to licensees pursuant to Norwegian law. It is possible for licensees to file an action for infringement. This applies both for exclusive and non-exclusive licensees that have standing in the case, and depends on the provisions of the licence agreement.
- Patent rights – Yes. Exclusive licensees have the same rights as a proprietor to bring proceedings for infringement, while non-exclusive licensees do not.
- Confidential information – No.
- Industrial design rights – Yes. Exclusive licensees have the same rights as a proprietor to bring proceedings for infringement, while non-exclusive licensees do not.
- Trade mark rights – An exclusive license may provide that the licensee shall have the same rights and remedies as if the licence had been an assignment. In such a case, the exclusive licensee may bring infringement proceedings in its own name against any person other than the proprietor. Otherwise, licensees (exclusive or not) do not have rights to bring proceedings for infringement in their own name unless they have first called upon the proprietor to do so and the proprietor refuses to, or fails to do so within 2 months after being called upon.
- Geographical indications – No.
- Copyright – Yes. Exclusive licensees have the same rights of action and are entitled to the same remedies as the owner of the copyright, except against the owner of the copyright.
- Layout designs of integrated circuits – Yes. Exclusive licensees have the same rights against a successor in title to the owner as they have against the licensor. They also have the same rights and remedies as the owner, except against the owner.
- Plant varieties protection – No.
Both licenses grant the same rights to enforce the licensed intellectual property rights. However, such right can be limited completely or partially according to what the parties state in the agreement.
Yes. The licensee’s rights as to lodging lawsuits are different.
Neither an exclusive nor a non-exclusive licensee can litigate on a patent in their own name alone. A patentee must give notice to a licensee who is recorded and allow them to join in the litigation.
In the case of a compulsory license the licensee can call on the patentee to defend a patent or take action against an infringer and if the patentee fails to do so within 2 months then the licensee may litigate in its own name.
The rights of exclusive and non-exclusive licensees in terms of enforcement are not differentiated in any of the applicable laws; any differences would be found in the specific agreements creating the licenses.
As for a patent, utility model, design and trademark, the statute sets forth only the difference between an exclusive registered license and an ordinary license. The licensee of an exclusive registered license has the same right that the right owner has against the infringer to seek an injunction and compensation for damages.
The statute does not distinguish between an exclusive ordinary license and a non-exclusive ordinary license, but there are court precedents that give some advantages to an exclusive ordinary license.
According to the court precedents, the licensee of an exclusive ordinary license can recover damages from an infringer. Additionally, in limited circumstances, the licensee of an exclusive ordinary license can seek an injunction against the infringer on behalf of the patent owner.
As for a copyright, there is no difference.
Unless this is expressly excluded in the license agreement, the exclusive licensee is entitled to bring a claim for infringement against third parties on their own. On the contrary, non-exclusive licensees do not have the capacity to initiate such proceedings, without the consent of the licensor. However, under general civil procedure rules any licensee may join an infringement action in order to claim its own damages.
An exclusivity clause is independent from clauses that estipulate enforcement possibilities in a licensing agreement. That is, either exclusive or non-exclusive licensees can have power to seek injunctions and sue for damages, it depends exclusively on the contract. It must be noted, though, that the Brazilian IP Law determines that, in order to be effective against third parties, the contract must be recorded in the BPTO – therefore, this step is necessary in order for licensees (exclusive and non-exclusive) to be able to seek injunctions and sue for damages.
Exclusive licensees have certain statutory rights to bring infringement proceedings in their own name, but the right owner must be joined in the proceedings, either as co-claimant or as a further defendant. Non-exclusive licensees, on the other hand, do not have the right to commence infringement proceedings. However, non-exclusive licensees of trade marks can call upon the proprietor to take action, and may take action themselves if the proprietor does not do so.
However, it is worth noting that these statutory defaults are commonly varied in negotiated licence agreements, so it is important to check the governing agreement to confirm the parties' rights in relation to infringement proceedings.
Patents: Exclusive licensees may bring suit to assert patents against third parties. If the patentee or some of the co-patentees or an exclusive licensee did not join the action for infringement as plaintiffs, then they shall be joined by the plaintiff as defendants.
Trademarks: Only the registered proprietor and a licensee may file suit. Exclusive and non-exclusive licensees may be listed as additional plaintiffs in a suit by the registered owner.
Designs: Exclusive licensees may bring suit to assert designs.
Copyrights: Exclusive licensees may bring suit to assert copyrights.
Non-exclusive licensees generally need the consent of the rights owner to initiate legal proceedings.
The exclusive licensee is considered to be eligible to initiate legal proceedings regardless of the consent of the proprietor unless it has been otherwise agreed upon in the licence agreement.
Except as otherwise stipulated in the licensing contract, exclusive licensees are entitled to bring an action for infringement if, after notice, the owner of the IPR does not bring the proceedings. However, exclusive licensees must be registered to the National Registry in order to bring an infringement action.
Non-exclusive licensee cannot introduce infringement actions but may join the infringement proceedings initiated by the owner of the IPR in order to obtain compensation of the prejudice suffered.
• patents: see Article L.615-2 of the IPC;
• trademarks, collective and certification marks: see Article L.716-5 of the IPC;
• designs: see Article L.521-2 of the IPC;
• semiconductors: see Article L.622-7 of the IPC.
Moreover unregistered licensees, either non-exclusive or exclusive, can join the infringement proceedings initiated by the owner to seek reparation for their own prejudice.
• patents : see Article L.613-9 of the IPC ;
• trademarks, collective and certification marks: see Article L.714-7 of the IPC;
• designs : see Article L.513-3 of the IPC;
• semiconductors: see Article L.622-7 of the IPC.
Regarding trademarks, the European Trade Mark Directive, together with recent case law from the Court of Justice of the European Union, tend to widen the conditions of the licensee’s action and not to require the prior licence registration to authorize the licensee to bring infringement claims (CJUE, February 4th, 2016, C-163/15 and CJUE, June 21st, 2016, C-419/15).
Under Italian Law, the owner and the exclusive licensee of an IP right can enforce the IP right. The possibility for the non-exclusive licensee to enforce the licensed IP right remains unclear, although is generally admitted by Italian case-law. Recently LD 15/2019 has expressly set out the possibility for a licensee to file an infringement action to protect a licensed trademark. More specifically, under Article 122 bis of the IPC, a licensee may start infringement proceedings with the prior consent to do so of the trademark owner. Moreover, an exclusive licensee may file an infringement claim if the trademark owner does not start an action soon after being asked to act against the infringement. The licensee is also entitled to intervene in pending infringement proceedings started by the trademark owner, to seek compensation for the damages the licensee suffered.
According to the leading opinion, non-exclusive licensees generally need the consent of the rights owner to initiate legal proceedings against third parties/infringers.
In the case of trademarks, the law expressly distinguishes between exclusive and non-exclusive licensees and provides that the exclusive licensee may independently and without the consent of the proprietor initiate such proceedings, if the trademark owner, after formal notice, does not himself bring infringement proceedings within a reasonable time period. Of course, the licensing contract may provide otherwise.
Patent: The Indian patent law provides similar rights to the exclusive license holder such as those of the patentee and such an exclusive licensee has the right to initiate an infringement suit against an infringer if an act of infringement is committed after the date of the license.
In Trademark, in terms of the exclusive and non-exclusive licensees, there is no difference in terms of enforcement.
In Copyright, no difference in terms of the enforcement rights granted.
In Designs, a non-exclusive licensee does not possess the right to claim for such infringement. This condition is also applicable for registered designs.
There are no different given for exclusive and non-exclusive licensees.
Maltese law allows for licences to either be exclusive or non-exclusive. With regard to trademarks and designs, exclusive licences grant a higher level of rights over and above the normal type of licence.
The rights and remedies of an exclusive licensee of a registered trademark of design right are concurrent with those of the IPR proprietor, and references in Maltese law to the proprietor relating to infringement are construed as applying to the exclusive license. The exclusive licensee is entitled to bring infringement proceedings in his own name against any person other than the proprietor. An exclusive licensee will have the same rights against a successor in title who is bound by the licence as he has against the person granting the licence. Moreover, an exclusive licence may provide the licensee with the same rights and remedies in respect or matters occurring after the grant of the licence as if the licence had been an assignment.
The law does not distinguish between exclusive and non-exclusive licensee however in practice the terms of agreements vary. The IP owner can grant exclusive or non-exclusive rights to a licensee. In practice exclusive rights are generally granted to a single licensee in a certain market. Exclusive licensee also may have right to enforce its rights however such right should be clearly provided in the license agreement. A non-exclusive licensee can be more than one a single market and usually non-exclusive licensee does not have right to enforce its license right against infringement of licensed IP by third parties.
Generally the rights of licensees regarding enforcement of the licensed IP will be determined by the terms set out in the licensing agreement. Otherwise, exclusive licensees usually have standing to bring infringement proceedings, and non-exclusive licensees will have standing if the owner is joined to the proceedings as co-claimant or defendant. Having said that:
- Patents – only patentees and exclusive licensees have standing to sue under the Patents Act 1990.
- Trade marks – the owner of a registered trade mark may authorise another person to use it. For use to be authorised it must be under the control of the registered owner. The authorised user may bring an action for infringement of the trade mark if the registered owner refuses or neglects to do so within two months of a request from the authorised user. If the authorised user takes infringement action the registered owner must be made a defendant in the action.
- Copyright – except as against the owner of the copyright, an exclusive licensee has the same rights of action and remedies of the owner of the copyright. Non-exclusive licensees may bring proceedings if the owner is joined.
Exclusive and non-exclusive licensees are given different rights for enforcement. A non-exclusive license is generally just a covenant not to sue the licensee for infringement. Therefore, the licensee has no inherent property right and no right to enforce the property.
An exclusive licensee may be granted the right to enforce the IP right. But typically, the exclusive licensee will have to sue jointly with the IP owner. If the exclusive license represents a transfer of "all substantial rights" in the property, and is therefore tantamount to an assignment, the exclusive licensee sue on its own. For trademarks, a non-exclusive licensee has been found to have standing to sue when the licensee is the exclusive distributor for a product sold under the trademark.