Importance Of recordal in the IP Rights-France
In today's business world companies have been making changes in the scope as well as organizations through merger, partial contribution of assets, assignments, license of change of legal status. In addition, marketing and organizational plans generate new trade names and/or addresses. Such modifications have great impact on the ownership of property rights, as patents, trade marks and designs. These modifications by law must be got published in the National Register, an operation which is known as recordal of an agreement that puts third parties on notice to know about the changes in ownership, allowing enforceability of the IP rights against them. For example under the EC Regulation on the Community trade mark, "as long as the transfer has not been entered into the Register, the successor in title may not invoke the rights arising from the registration of the Community trade mark". Since the companies consider this administrative operation to be a costly affair, the recent French case law has held that not proceeding with recordals in due time can have considerable financial impact.
Transfer of ownership:
Generally, contracts clearly define the transferred IP rights and other compulsory issues especially the financial transaction. Sometimes where there is a partial contributioon of assets, the contract does not provide detailed list of all the patents, trade marks and designs concerning transfer of ownership, but simply limits to the main ones such as bnuildings and branch of activity. So, parties must then define the transferred IP rights during the recordal. To reinforce the idea that all transferred IP rights must be listed in a transfer agreement, the French Supreme Court in a decision on February 7, 2006 decided that "a transfer agreement not containing an explicit reference to an IP right meant that the right was not transferred". Furthermore, it should be noted that if IP rights are sold by their owner to different purchasers, the IP rights will be finally owned by the purchaser who is the first to proceed with the recordal of the transfer agreement at the relevant national register.
Licences:
To put third parties on notice, licences must be recorded in the National Register in the case of Community trade marks which should be effective in all the Member States after entry under the European Community Regulation. This is equally important for patents. For instance, in France when a licence is nsot recorded, an exclusive licensee cannot serve a writ to any third party and cannot join an infringement trial started by the patentee. Only a recordal on the European Patent Register would allow a licensee to join the trial.
Unwanted consequences:
The recordal operation may directly impact the financial status of a company. Managing the Ownership of IP rights in an organized and timely fashion will help prevent costly consequences in the event of litigation, if it is based on the following rules:
- An agreement relating to IP rights must explicitly detail with regard to countries, priority, extensions, etc.
- Define in the agreement the name of the party which is in operation of the recordal i.e. successor in title or the licensee.
- Analyze as a first step the IP rights portfolio to define those which may be subject to litigation due to their economic value with the recordal. For other IP rights, depending on the budget, the recordal operation may be deferred, but it is necessary to safely store all documents needed for the recordal.
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