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 property.
(b) Locus standii - the licensee's the right to issue proceedings
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 property involved.
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 others.
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.