Under New Zealand law, exclusive licensees have specific
statutory rights in relation to infringement proceedings which sole
or non-exclusive licensees do not enjoy. If you are licensing in or
out of New Zealand, it is important to understand the difference,
and the implications of each.
What is an "exclusive" licence in New Zealand?
A sole licence typically implies that the licensor will retain
the same rights as the licensee, but will not license those rights
to anyone other than the licensee. In contrast, an exclusive
licence means that the licensee alone may exercise the rights to
the exclusion of the licensor.
Why does it matter?
The distinction is important for two reasons.
(a) Licensor's right to compete
Firstly, a sole licence may (depending on the other terms of the
agreement) allow the licensor to compete with the licensee. It is
therefore essential to ensure the agreement clearly states what
rights the licensor retains in relation to the intellectual
(b) Locus standii - the licensee's the right to issue
Secondly, exclusive licensees enjoy certain statutory rights in
New Zealand in relation to whether or not they have standing (locus
standii) to issue proceedings for infringement. To complicate
matters, the rights vary according to the type of intellectual
For example, subject to any contrary agreement, an exclusive
licensee of a patent has the same right as the patentee to sue for
infringement and must join the patentee as a defendant unless the
patentee is also a plaintiff. If the licensee has not previously
registered notice of its interest in the patent, it must do so
before commencing proceedings. An exclusive licensee of copyright
has the same rights as the copyright owner (except as against the
copyright owner) and may exercise those rights concurrently with
the owner. The same does not apply to trade marks; a trade mark
licensee (whether exclusive or otherwise) must first request that
the trade mark owner commences proceedings.
The result is that if the licence includes multiple intellectual
property rights and more than one is infringed the licensee may (in
the absence of any agreement to the contrary) have the right to
issue proceedings in relation to some infringing acts but not
Firstly, given the potential for differences of interpretation
in cross-border agreements, it is always advisable to define the
term "exclusive" or "sole" (whichever is
applicable) and set out the rights and responsibilities of each of
the parties in detail.
Secondly, it is important to set out in the licence agreement
the rights and obligations of each party in the event of
infringement. This is particularly important if a licence grants
rights in more than one type of intellectual property.
Finally, it is always useful seek advice from a New Zealand
lawyer who specialises in licensing.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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