Patent and Know-how Licence (intra-group)
PricewaterhouseCoopers AG
This licence is a Swiss-law governed standard agreement for the licensing of patents and/or know-how between group companies.
Author's Note
The Patent and Know-how Licence (intra-group) is a Swiss-law governed standard agreement for the licensing of patents and/or know-how between group companies. Intra-group patent and know-how licences may be required to evidence the transfer pricing of intellectual property rights between group companies. The template may be configured for the licensing of patents, know-how or both patents and know-how, in relation to the licensee’s manufacture and supplying of certain products offered by the group. The licence is drafted as non-exclusive in relation to a user-defined territory, and provides for a licence fee based on a percentage of net sales revenue. The user must define the products to which the license relates. Optionally, the user may include certain default provisions regarding the marketing and sale of the products manufactured under license. Care should be taken to ensure that if used, these provisions are consistent with any other agreement between the...
Read moreThe Patent and Know-how Licence (intra-group) is a Swiss-law governed standard agreement for the licensing of patents and/or know-how between group companies.
Intra-group patent and know-how licences may be required to evidence the transfer pricing of intellectual property rights between group companies. The template may be configured for the licensing of patents, know-how or both patents and know-how, in relation to the licensee’s manufacture and supplying of certain products offered by the group.
The licence is drafted as non-exclusive in relation to a user-defined territory, and provides for a licence fee based on a percentage of net sales revenue. The user must define the products to which the license relates.
Optionally, the user may include certain default provisions regarding the marketing and sale of the products manufactured under license. Care should be taken to ensure that if used, these provisions are consistent with any other agreement between the parties relating to the manufacture or distribution of products.
Terms which are configurable to the user’s needs include:
- Scope of use (products to which the license relates)
- Patents and know-how included in the license;
- Licensor’s obligations to maintain patents;
- Quality control, patent marking and reporting;
- Registration of the licensee as a registered user of the patents;
- Term and termination;
- Fees and payment;
- Sub-licence and assignment rights;
- Provisions relating to liability and indemnity;
- Provisions relating to notices;
- Dispute resolution, jurisdiction and arbitration; and
- Other boiler-plate provisions (e.g. confidentiality).
Circumstances of Use
This document is intended to be used for intra-group transfer pricing purposes to document the licensing of patents and know-how from one group company to another. The Patent and Know-how Licence (intra-group) may be used for cross-border transactions where the parties have agreed to use Swiss law.
Terms of Use
The purchase of this Product is subject to PartnerVine Terms.
You (the registered user through whose account the purchase is made) may:
- Access the document-generation interview for 90 days from date of purchase;
- Export and download an unlimited number of copies of the document(s) in Word or pdf format;
- Share and use the document copies in connection with the circumstances described in this Author’s Note and only for the ordinary business purposes of the group of companies to which you belong.
Other Comments
No warranty or representation is given or made that the allocation of functions and risk and the related transfer pricing arrangements provided for in this document are appropriate in the specific circumstances of any given group of companies. No legal or tax advice is provided and nothing in this template or the related user interview shall be deemed to constitute the provision of legal or tax advice in relation to any fact or matter. Where necessary, specialist legal and tax advice should be sought together with input from group accounting functions prior to executing this agreement.
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Frequently asked questions
If the licence has already been granted, the agreement will have retrospective effect.
Three options for licence term length are possible: (1) fixed term, (2) initial term with either successive or indefinite extension, or (3) indefinite term
Termination period can be 1 month, 3 months or 6 months.
A licence may be granted for (1) all products or for (2) specified products only. Moreover, a licence may include patents and/or know-how.
No. It depends on the contractual agreement. It is possible to include (1) all patents and applications relating to the permitted products or (2) to include only specified patents.
No. Licencing must not be limited to take place at a specified place. However, licencing can be limited to a specific territory (or territories) or to a specific country (or countries). Typically the licence should reflect the territory in which the licensee manufactures and/or distributes the permitted products.
It may be appropriate to permit sub-licensing, for example to other group companies or specified third parties (e.g. third parties included in the manufacturing). The latter must be mentioned by name
The Licensee can be obliged to (1) actively use patents and (2) to be registered as a user of the patents.
An obligation on the Licensor can be included to:
(1) provide support for the use of licensed intellectual property. Support could include the provision of supporting materials (production processes, technical specifications, etc).
(2) monitor the relevant markets and the activities of competitors in order to identify any matter, activity or threat that could have an impact on the patents.
(3) maintain an appropriate program for the protection of Intellectual Property Rights including market surveillance, cease-and-desist actions and related enforcement activities.
It is possible to require patent marking. Additionally, there could be a statement that manufacturing takes place under licence. Moreover, any correspondence of the Licensee with regulatory or other authorities can be required to be provided to the Licensor.
The licence fee is calculated as a percentage of net sales revenue. The licence fee may be payable on all revenues (including inter-company sales) or only on revenue from third party sales. The calculation approach may be (1) informal: giving maximum flexibility for calculation or (2) formal: a structured approach to calculation and payment of licence fees including an escalation process for disputes is included.
It is essential to define whether net sales revenue is equal to invoiced amounts or to revenues that were actually received. Consider that the percentage rate applied may require special tax input.
Net Sales Revenue may exclude (1) trade discounts, (2) rebates and sales or similar taxes, (3) freight and shipping costs, (4) commissions to agents or (5) other. Consider tax and transfer pricing implications of excluding certain categories of cost.
An under- or overpayment of the Licence Fee may be revealed in the course of an audit. As a result, there should be a definition if such subsequent payment or reimbursement shall be made with interest.
Payment frequency can be (a) annually, (b) bi-annually, (c) quarterly or (d) flexible
Several options exist: (1) Licensor indemnifies Licensee for all loss arising out of use of the trade marks. This may be appropriate if the licensee is compensated on a limited risk basis. (2) Licensor indemnifies Licensee only for loss arising out of IP infringements. This would typically be found in an arm's length trade mark licence. (3) Licensor specifically excludes liability. You may optionally specify that the licensee will indemnify the licensor in certain circumstances.
Moreover, liability can be excluded for loss arising from Licensee's misuse or modification of the trade marks. Plus, the Licensee may have to indemnify the Licensor for loss arising out of Licensee's supply of the Offerings if stated in the contract.
You may specify whether each party should bear their own costs arising from the negotiation, preparation, amendment, preservation and enforcement of the agreement, or whether one party should bear all the costs.
Yes. You may specify a process for escalation of disputes to the parties’ senior representatives, prior to any litigation or arbitration.
Different warranties may be included: (1) standard mutual warranty as to right to enter into and perform agreement, (2) Licensor warrants ownership of licensed IP, (3) disclaim warranty that licensed IP is accurate / sufficient, (4) disclaim all warranties except as explicitly provided.
(1) Licensor indemnifies Licensee for all loss arising out of use of the licensed intellectual property: Most appropriate if the licensee is compensated on a limited risk basis. Consider also the terms of other agreements between the parties, i.e. distribution or manufacturing agreements.
(2) Licensor indemnifies Licensee only for loss arising out of IP infringements: This would typically be found in an arm's length patent and/or know-how licence.
(3) Licensor specifically excludes liability, but you may optionally specify that the licensee will indemnify the licensor in certain circumstances.
Yes. You may specify a process for escalation of disputes to the parties’ senior representatives, prior to any litigation or arbitration.
Yes, in an intra-group agreement, the parties may have more flexibility if email qualifies as writing (e.g. for the purposes of “written notice”). This must be specified in the agreement and may even allow termination. It is good practice to specify who is able to receive or send notices. Moreover, inserting a title is recommended, rather than an individual's name (e.g. "the Finance Director"), as roles and responsibilities change over time.
You may choose to resolve disputes in court or through arbitration.
This agreement is governed by Swiss law. If you do not specify the place of jurisdiction, any court which is competent under Swiss law will have jurisdiction to resolve a dispute.
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New updates on the safe-keeping duties for depositaries of Alternative Investment Funds The European Commission has published a draft delegated regulation proposing to amend the Delegated Regulation (EU) No 231/2013 to the Alternative Investment Fund Managers Directive (AIFMD) as regards safe-keeping duties of depositaries for Alternative Investment Funds (AIFs). The newly proposed obligations would address depositaries and...
FinSA and FinIA: Differences resolved between the National Council and the Council of States On 12 June 2018, the National Council resolved the last differences on the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA). Thus, the FinSA and the FinIA are ready for the final votes, which will take place on Friday, 15 June 2018.
Get up to Speed on the EEA Agreement Amendment On 31 May 2018 the EEA Joint Committee reached a decision without reservation regarding the implementation of Solvency II Level 2 and EMIR Level 2 frameworks. Thus, as of 1 June 2018, the EMIR and Solvency II Level 2 delegated acts are applicable to Liechtenstein, Norway and Island.
EMIR Transaktionsreporting und Solvency II in Liechtenstein Go Live – Kommen Sie auf den neusten Stand bzgl. der EWR Vertragsergänzung Am 31. Mai 2018 beschloss der gemeinsame EWR-Ausschuss die vorbehaltslose Implementation der Solvency II Level 2 und der EMIR Level 2 delegierten Rechtsakte. Folglich wurden per 01. Juni 2018 die EMIR und Solvency II Level 2 Rechtsakte in Liechtenstein, Norwegen und Island anwendbar.
FinIA and FinSA on the right track On 29 May 2018, the National Council passed its resolution on the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA). Shortly thereafter, on 4 June 2018, the Council of States discussed about FinSA and FinIA and resolved the following differences:
FINSA and FINIA: Only few differences remaining On Tuesday 29 May 2018, the National Council discussed again about the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA). After the resolution of the National Council a few differences remain to the text approved by the Council of State.
How tightened corruption laws affects compliance management systems With the revision of the Criminal Law on Corruption, the criminal responsibility of companies and their management is gaining in importance.
Switzerland introduces the clearing obligation for certain derivatives for FC+ and NFC+ The Swiss Financial Market Supervisory Authority FINMA has recently announced that it will introduce the clearing obligation, meaning to clear certain derivatives over central counterparties, under the Swiss Financial Market Infrastructure Act (FMIA) that are traded by counterparties having the status of either an FC+, meaning large Financial...
A primer on cryptocurrencies trading regulation in Switzerland This primer seeks to give an overview of the key obligations under Swiss regulatory laws related to cryptocurrencies and asset management related to cryptocurrencies.
An initial coin offering (ICO) or a token sale is when a company sells a predefined number of digital tokens to the public in a limited period of time. The ICO market has grown very rapidly in recent months and has been a new avenue for blockchain-based start-ups and projects to get the funding needed to launch their projects.
Partial entry into force of the Swiss DLT-act On 1 February 2021, the parts of the Swiss DLT-act that introduce ledger-based securities (i.e. register uncertificated securities) to Swiss law have entered into force. The remaining provisions of the DLT-act will enter into force on 1 August 2021.
The E-ID Act from a data protection perspective On 7 March, the E-ID Act will be put to the vote in Switzerland. Especially in the area of data protection, opponents and supporters disagree on the extent to which the introduction of the law would cause problems.
Platform Economy: Prepare for the future and outshine with an online matchmaker Platform business models has changed how businesses are conceptualised and conducted. Interested to know more about the value of a platform business model?
A unique opportunity to become a responsible business role model With the narrow rejection of the Swiss Responsible Business Initiative (RBI), Swiss companies will have the challenge of aligning with stricter, EU-inspired standards in terms of corporate disclosure and sectoral human rights due diligence. In this blog post we explain how you can take the reins and become best in class – and why the current...