Licensing Agreements under CISG: A Comprehensive Guide
The United Nations Convention on Contracts for the International Sale of Goods (CISG) is a treaty that governs contracts for the sale of goods between businesses in different countries. The CISG is an important tool for international trade, providing a standardized set of rules that businesses can use to enter into contracts with each other.
Under the CISG, licensing agreements are considered contracts for the sale of goods. This means that businesses can use the CISG to govern licensing agreements with foreign partners. In this article, we’ll explore the key elements of licensing agreements under the CISG.
What is a licensing agreement?
A licensing agreement is a contract between a licensor and licensee to grant the licensee the right to use the licensor`s intellectual property. The licensor retains ownership of the intellectual property but allows the licensee to use it for a specific purpose.
A licensing agreement can cover a wide range of intellectual property, including patents, trademarks, copyrights, and trade secrets. The licensee may be granted the right to use the intellectual property in a specific geographic area, for a certain period of time, or for a particular product or service.
Key elements of licensing agreements under the CISG
1. Offer and acceptance: Like any contract, a licensing agreement must contain an offer and acceptance. The offer must include the specific terms of the license and the consideration to be paid by the licensee. The acceptance must demonstrate the licensee`s willingness to be bound by the terms of the agreement.
2. Price: The CISG requires that the price for the license be determined or determinable at the time the agreement is formed. This means that the licensing agreement must specify a fixed price or a formula for determining the price. If the price is not determined or determinable, the agreement may be unenforceable.
3. Warranties and representations: The licensor may provide warranties and representations about the intellectual property being licensed. The warranties may include the licensor`s ownership of the intellectual property, the validity of any patents or trademarks, and the absence of any infringement claims. The licensor must disclose any known defects in the intellectual property.
4. Termination: The licensing agreement must specify the circumstances under which the agreement may be terminated. Generally, the licensee may terminate the agreement if the licensor breaches any of the terms of the agreement or if the intellectual property is defective.
5. Governing law: The CISG provides a default set of rules that apply to licensing agreements between businesses in different countries. However, the parties may choose to specify the governing law of the agreement in the contract.
Conclusion
Licensing agreements under the CISG are a valuable tool for businesses engaged in international trade. By providing a standardized set of rules, the CISG makes it easier to enter into licensing agreements with foreign partners. If you are considering entering into a licensing agreement, it is important to work with an experienced attorney who can guide you through the process and ensure that your agreement complies with the CISG and other applicable laws.
