Analysis and assessment of warranty of validity in license contract

دانشنامه حقوق اقتصادی

Article 2, Volume 27, Issue 17, June 2020, Pages 25-44   

Document Type: Scientific research

DOI: 10.22067/le.v27i16.80053

Author

Ali Saatchi^*

Phd in private law, Shahid Beheshti university Tehran,Tehran,Iran

Abstract

Introduction
According to Article 2 of the Patent, Industrial Designs, and Trademarks Act, the intended knowledge has legal credit and, consequently, legal protection. The knowledge will have three conditions: 1- must be new 2- must be innovative and 3- must have industrial applicability, namely, has a validity certificate and being in right of priority stage and their patent application was filed before legal authorities. However, from a contractual point of view, the mere validity of the intellectual property at the time of the contract is not sufficient as the exploitation of the invention depends on its subsistence. It is, therefore, necessary to distinguish between "original credit" and "subsistence" because the patent is only a criterion for evidence of its validity. The patent may be invalidated after the registration for various reasons. Therefore, because the subsistence is necessary for the exploitation of intellectual property, and since the preliminary validity of the invention is also costly, it is necessary to warranty the validity appropriately. It should also be noted that due to this feature (the revocation whenever possible) in the patent law system, it is less considered in terms of the insurance. It may be due to the weakness of the patent system in the scope of patents and occurring frequent violations as well. To this end, the present research seeks to answer the fundamental question of whether in the patent license, there is a warranty or commitment from the licensor for the validity of the invention.
Theoretical framework
In the present article, the concept of Warranty of validity is compared with other similar concepts at first and then the arguments of pros and cons about the existence of a Warranty of validity in the license agreement are examined. At first, the impossibility of Warranty of validity and then the reasons for not recognizing such a warranty in the license agreement are examined.
Methodology
The research method in this article is descriptive-analytical in the sense that concerning the topic mentioned above, firstly, the existing views and critiques will be examined and finally, a concluded theory will be presented.
Results and discussion
Regarding the analysis and evaluation of the credit warranty in the patent license, it has become clear that the authors suggest two significant reasons in opposition to the credit. First, the reason for denial of the structural existence of such a warranty, and in the second argument, the validity of the license agreement is denied. The examination of the reasons mentioned above showed that the obligation to warranty is entirely correct and does not face any severe problems by contractual rules. However, concerning the patent validation warranty, there are three main reasons for rejecting a warranty: 1- the lack of rationality in the second license. 2- the negation of the warranty following the doctrine of modification. 3-the lack of warranty due to the license.
Nevertheless, examination of the reasons mentioned above shows that such a warranty in the license agreement is not only unreasonable but may be fulfilled in some cases, but regarding the doctrine of changes in the field of invention, it should be noted that its explanation requires recognition of subject matter of the license agreement distinguishing it from goods and, ultimately, the denial of contractual form warranty. Although, in some cases, it may be following the current customs of license agreements, in cases where the License contains monopoly conditions, there is a higher degree of warranty of validity. In other words, it depends on the type of reading that exists in the license agreement and cannot believe in absolutely non-credibility.
Conclusions & Suggestions
Regarding the arguments described above, a supportive view of credit warranty in the license agreement is distinguishing between the different conditions of credit. Whereas there is no access to all scientific resources; the attribution of the novelty of an invention, beyond the licensing knowledge, is contrary to contractual expectations and mutual agreement, but about other patent conditions (industrial use and innovative step) Because it is at the discretion of the licensor, the commitment to warranty and attributing to the latter person seems correct. However, in case of disagreement between the parties in the exclusive license, the existence of warranty is a principle and the licensor shall prove non-warranty of credit, but in the non-exclusive license, non-warranty of credit shall be proved by the licensee.
  

Keywords

Warranty of validity; unreasonably; Quirkiness of patent doctrine; Contractual frame; Substantial conditions of innovation

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CASES

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