Report on the IMKR Lecture “International Technology Transfer Agreements – Choice of Law and Jurisdiction Clauses in License and Intellectual Property Assignment Agreements” by Prof. Heinze

Following opening remarks by Prof. Rösler, on May 31, 2016, Prof. Dr. Christian Heinze, LL.M., Director of the Institute for Legal Informatics at Leibniz University Hannover, gave a presentation in the recently renovated Unteres Schloss on “International Technology Transfer Agreements – Choice of Law and Jurisdiction Clauses in License and Intellectual Property Assignment Agreements.” Prof. Heinze began by highlighting the problem that a licensee must continue to pay license fees after the expiration of patent protection, even if no license term had been agreed upon (based on Kimble v. Marvel Entertainment, LLC, 576 U.S. 446 (2015)). A comparison between the United States and Germany illustrates how differently this issue is addressed. The Supreme Court ruled that, after the expiration of patent protection, free public access must not be restricted in order to protect competition. In contrast, under German law, pursuant to § 15 of the Patent Act (PatG), the agreement regarding the term of the license takes precedence. In the absence of such an agreement, the license agreement is deemed to have been concluded for the duration of the patent in cases of doubt. Using this example, Prof. Heinze underscored the enormous importance of specifically and legally securely agreeing upon the applicable law and the venues for litigation.

Prof. Heinze then clarified the specific considerations that must be taken into account, particularly in license and intellectual property assignment agreements. For example, the Rome I Regulation applies to contractual obligations in Europe. However, in matters of intellectual property law, the law of the country of protection remains applicable without further ado. Thus, based on the country-of-protection principle, the effects in rem of licenses, restrictions on assignment and licensing, and even infringements of intellectual property rights are not governed by the law of the contract. When applying conflict-of-laws rules, it must also be borne in mind that intellectual property issues must be treated in accordance with the mandatory law of the country in which the patent is in force.

If no choice of law was made in the license agreement, the applicable law is determined in accordance with Article 4(2) of the Rome I Regulation. As a rule, the law of the licensor then applies. In such cases, however, it must be noted that the granting of a license constitutes neither a service nor the sale or lease of an item. The situation would only differ if the license were granted exclusively for a single country and the law of the country of protection applied. It should therefore be noted that contract law (choice of law) has no bearing on intellectual property law issues.

In the second part of the lecture, Prof. Heinze emphasized the importance of jurisdiction agreements and their potential impact on the choice of law. He provided an overview of U.S. law in this regard. In principle, the contractually agreed-upon choice of law is respected there, as long as it designates the law of the forum state. However, the application of the choice of law depends heavily on the private international law of the respective U.S. state. There are extreme differences in the substantive contract law of the individual states. For example, California is more liberal than New York, Delaware, or Texas, which apply very strict standards when interpreting the choice of law.