L54 Termination

Though it is not always discussed by those negotiating a licence, some careful thought needs to be given to how the agreement might end and what provisions might be made for such an event.

Breach of contract will usually be specified as a cause for termination but time for remedying the breach is usually allowed for. Other causes allowed for include bankruptcy, acquisition, merger or force majeure.

A key role of a termination clause in a licence agreement is to specify what obligations that the parties are subject to or what rights are to persist beyond the end of the agreement.

This can be a critical issue for sub-licensees where the licensee's licence is terminated.

Another critical issue concerns the effect on licences to improvements developed over the period during which the licence was terminated. This can be an area of dispute and in addition clauses regarding developments after termination of IPRs or after confidentiality is lost may not be covered the TTBER (Art2).