[1]
In TechLawNews 51 we discussed selected licensing attributes and offered to continue the discussion on succession rights in this issue.
[2]
Succession right in licensing regulates the legal fate of a (sub-) license if and when the intellectual property (IP), for which it was granted, is acquired by a new owner. The issue is relevant because there are legal and economic aspects attached to such license, e.g. sub-licenses or supply chain obligations.
[3]
Generally, absolute rights trump obligatory rights.2 This means e.g. that an acquirer of a good or right must not tolerate any legal encumbrance on his/her new (intellectual) property. However, in Trademark, Design and Patent Law, where a license right may be entered in a public registry, the concept «acquisition does not trump license» prevails. Hence, any license entered in the registry is valid against a new acquirer, who must tolerate the license.3
[4]
Unlike trademarks, designs and patents, which become legally valid only upon registration,4 copyright protection begins as soon as the (creative) idea materialises on paper or by other means.5 Consequently, licenses granted for copyrights cannot be registered. Does such missing license registration in Copyright Law have a negative impact for the (sub-) licensee?
[5]
According to Hilty6, filling the legal loophole in Copyright Law by reference to Lease Law,7 where the lease passes to the acquirer together with ownership of the leased object, is a policy question. If such analogous application is rejected, then any acquisition of a good or right trumps any license thereon – the licensee loses his/her use right. Furthermore, a legal non-exclusive license for good faith licensees, as is foreseen in Trademark, Design and Patent Law8 in Copyright Law, is not applicable.
[6]
According to the Swiss Federal Court, there is no succession right if a license is not entered in the public registry, not even if the acquirer was aware (i.e. was in bad faith) of the license between the seller and the licensee.9 The Supreme Court of the Canton of Zurich restated that there is no succession right in copyright if the IPR is assigned.10 This is contrary to German law, where a termination of a license does not necessarily terminate its sub-license.11
[7]
So yes, acquisition trumps license in Copyright Law. To mitigate the risk of losing succession rights in copyright licenses the licensee could, e.g., agree joint ownership of (foreground) copyrights; include an assignment prohibition (potentially with a financial penalty) in the license agreement; foresee a broad termination right for convenience in its own sub-licensing agreements; or, from an economic viewpoint, request a reasonable reduction in licensing fees.
Daniel Ronzani
- 1 Vgl. Daniel Ronzani, Selected Licensing Attributes, in: Jusletter IT 26. Februar 2015.
- 2 Guhl/Koller, Das Schweizerische Obligationenrecht, 9.A. 2000 Zürich, §2 N 3 ff.
- 3 Art. 18(2) Federal Act on the Protection of Trade Marks and Indications of Source (TmPA); Art. 15(2) Federal Act on the Protection of Design (DesA); Art. 34 Federal Act on Patents for Inventors (PatA).
- 4 Art. 5 TmPA; Art. 5 DesA; Art. 6 PatA.
- 5 Art. 2 Federal Act on Copyright and Related Rights (CopA).
- 6 Hilty, Urheberrecht, 2010 Bern, RZ 260.
- 7 Art. 261 Code of Obligations (CO).
- 8 Art. 53(3); Art. 34(3) DesA; Art. 29(3) PatA.
- 9 Decision of the Swiss Federal Court 4A_447/2009 of 9 November 2009, Cons. 3.
- 10 Decision of the Surpreme Court of the Canton of Zurich LK100001 of 27 August 2012, Cons. 7.4.3.
- 11 See in detail: Iskic/Strobel, Lang lebe die Unterlizenz?, sic! 2013, S. 672.
