L19 Exclusive Licenses

An Exclusive Licence excludes even the owner of the IP from exploiting it and permits only the licensee to exploit the IP concerned.

    An Exclusive Licence is similar in effect to an assignment
    Whilst the effects on exploitation are similar important differences remain especially concerning taxation and control. Licenses are generally preferred by IP owners    1.

    Several exclusive licensees may exist.
    Exclusive licenses may be granted for several different territories, fields of use or acts.

    Exclusive Licensees may have a right to take legal action against infringers
    This usually will not stop the owner of the IP also taking legal action against infringers.

    Exclusive licences are preferred by licensees of new technology
    New technology will require considerable investment to develop it for exploitation.

    Exclusive licenses make IP exploitaition depend entirely on the licensee
    Agreements will usually include terms ensuring the best endeavours of the licensee.

Competition Law implications often exist.
Exclusive licensees within the EC may be 'open' in that they do not aim to prevent parallel imports by third parties or 'closed' if they do attempt to1. Closed exclusive licenses are objectionable under EC competition law but open exclusive licenses may be acceptable providing they are not for a long period and the technology involved is novel.

1 There may be cases where the owner does not have the resources to manage an IP portfolio and assignment is preferable.
2 Nungesser& Eisele v EC Commission [1983] 1 CMLR 278 "The Maize Seed" Case.