LICENSING AND TRANSFER OF INTELLECTUAL AND INDUSTRIAL PROPERTY RIGHTS

Licensing and Transfer Procedures in Intellectual and Industrial Property Rights

Entrance

Intellectual and industrial property rights protect innovative and creative ideas and maximize their commercial value. Licensing and transfer transactions play a critical role in the effective management and commercial use of these rights. In Türkiye, licensing and transfer transactions related to intellectual and industrial property rights are regulated within the framework of the Industrial Property Law No. 6769.

Types and Importance of Licensing Agreements

A license is the right to use an intellectual property right granted by its owner to another party. License agreements specify the details of how the intellectual property right will be used. The Industrial Property Law regulates various types of license agreements and their legal consequences:

I. Single License and Exclusive License

• • Exclusive License: An exclusive license is an agreement where the licensee grants the right to use a specific license to a particular person (licensor), while reserving the right to grant the same right to multiple individuals. Article 123 of the Trademark Law states that the exclusive license allows other licensees or the licensee himself to exercise the same right.
  • Exclusive License: An exclusive license grants the right to use the product exclusively to one person (the licensee) and does not authorize anyone else, including the licensee, to grant the same right. Article 124 of the Industrial Property Law states that only the licensee can exercise this right and others cannot benefit from it.

SMK Article 124:

Secret patent

ARTICLE 124 - (1) If the Institution concludes that the invention in question is important for national security, it shall forward a copy of the application to the Ministry of National Defence for its opinion and inform the applicant of the situation.

(2) If the Ministry of National Defence decides to keep the application process confidential, it shall notify the Institution of its decision within three months from the date of notification. If no decision on confidentiality is made or if no notification is made to the Institution within the said period, the Institution shall initiate the procedures related to the application.

(3) If the patent application is subject to confidentiality, the Institution shall notify the applicant of the situation and register the application as a confidential patent application without taking any further action regarding the application.

(4) The patent applicant may not disclose the confidential patent application invention to unauthorized persons.

(5) Upon the request of the patent applicant, the Ministry of National Defence may grant permission for the partial or complete use of the invention that is the subject of the patent application.

(6) The patent applicant may claim compensation from the State for the period during which the patent application was kept confidential. If no agreement can be reached on the amount of compensation to be paid, the amount of compensation shall be determined by the court. Compensation shall be calculated taking into account the importance of the invention and the amount of potential income the patent applicant would have obtained if he/she had been able to use it freely. The right to claim compensation is extinguished if the invention, which is the subject of the confidential patent application, is disclosed due to the fault of the patent applicant.

(7) No annual fee is paid to the Institution for confidential patent applications during the period they remain confidential.

(8) The institution may lift the confidentiality prescribed for a patent application upon the request of the Ministry of National Defence. A patent application that has been declassified shall be treated as a patent application from the date of its declassification.

(9) If an invention made in Türkiye is important for national security, a patent application cannot be filed for that invention in another country. If a patent application made to the Institution for an invention made in Türkiye is subject to the provisions of the first to eighth paragraphs, a patent application cannot be filed for that invention in another country without the permission of the Ministry of National Defence.

(10) If the inventor resides in Turkey, the invention shall be deemed to have been made in Türkiye until proven otherwise.

 

1. Contractual licensing clause 125- (1) A patent application or patent may be the subject of a license agreement.(2) A license may be granted as an exclusive license or a non-exclusive license. Unless otherwise agreed in the contract, the license is non-exclusive. In non-exclusive license agreements, the licensor may use the patented invention himself or grant other licenses to third parties regarding the same invention. In the case of an exclusive license, the licensor cannot grant a license to anyone else and, unless he explicitly reserves his right, he cannot use the patented invention himself.

   (3) Unless otherwise agreed in the contract, licensees cannot transfer or sublicense their rights arising from the license to third parties.

   (4) Unless otherwise agreed in the contract, the licensee may make any disposition regarding the use of the patented invention during the protection period of the patent. The licensee must comply with the terms set forth in the license agreement. Otherwise, the patent holder may assert the rights arising from the patent against the licensee.

    

Obligation to provide information

ARTICLE 126 - (1) Unless otherwise agreed in the contract, the party transferring or licensoring the patent application or patent is obliged to provide the transferee or licensee with the technical information necessary for the normal use of the patented invention.

(2) The transferee or licensee is obliged to take the necessary measures to prevent the disclosure of confidential information given to him/her.

Liability arising from the transfer of rights and licensing

ARTICLE 127 - (1) If it is subsequently discovered that the person transferring or licensoring the rights granted by the patent application or patent was not authorized to perform these transactions, that person shall be liable to the relevant parties for this situation.

(2) In cases where a patent application is withdrawn, rejected, or the court decides that the patent right is invalid, the provisions of Article 139 shall apply, unless the parties have provided in the contract for a more comprehensive liability on the part of the transferor or licensor.

(3) In the event that the transferor or licensor acts in bad faith, they are always liable for their actions. Bad faith is deemed to exist if the transferor or licensor has not informed the other party of the reports and decisions in Turkish or a foreign language regarding the patentability of the patent application or invention subject to the patent, or of their knowledge on this matter, and has not included in the contract any documents containing statements regarding these matters.

(4) The period for claiming compensation arising from the provisions of this article begins on the date the court decision forming the basis of the liability lawsuit becomes final.

Proposal for granting licenses

ARTICLE 128 - (1) The patent applicant or patent holder may, by a written request to the Institution, declare that they will grant a license to anyone who wishes to use the patented invention. The licensing offer is published in the Bulletin.

(2) If there is an exclusive license registered in the registry, the patent applicant or patent holder cannot offer to grant licenses to others.

(3) The patent applicant or patent holder may withdraw the licensing offer at any time. The withdrawal of the offer is published in the Bulletin.

Transfer Procedures and Legal Processes

Transfer refers to the transfer of an intellectual property right from its current owner to another party. The Industrial Property Law regulates transfer procedures and the legal processes related to these procedures

I. Transfer Agreement

Contract Content: The transfer agreement specifies the terms under which the intellectual property right will be transferred. Article 139 of the Industrial Property Law regulates the information and conditions that must be included in the transfer agreement. These conditions include the scope of the transferred right, the transfer price, and the obligations of the parties.

Signing and Approval: The transfer process begins with the signing of the contract, depending on the agreement of the parties. Article 140 of the Trade Registry Law states that the transfer contract must be notarized, but this requirement may not apply in all cases.

II. Registration: After the transfer process is completed, the transfer must be registered with the relevant intellectual property office. Article 141 of the Intellectual Property Law regulates the notification and registration of transfer transactions with the intellectual property office.

Registration: The registration process ensures that the transferred right is recorded in official records. Article 142 of the Industrial Property Law states that registration provides for the official recognition of the transferred right and its acceptance as valid by third parties.

I. Legal Processes

• • Legal Review of Transfer Transactions: Before a transfer transaction, a review should be conducted to ensure compliance with legal regulations. Article 143 of the Trademark Law regulates the necessary steps to check the legal validity and compliance of the transfer agreement.
  • Dispute Resolution: Any disputes that may arise during or after the transfer process must be resolved through legal action. Article 144 of the Industrial Property Law specifies the competent courts for resolving legal disputes related to transfer transactions.

The Practical Significance of Licensing and Transfer Procedures

Licensing and transfer transactions are of great importance in terms of managing intellectual and industrial property rights. These transactions form the cornerstones of commercial strategies and collaborations

I. Strategic Partnerships and Revenue Growth

Collaborations Through Licensing: Licensing agreements enable businesses to establish strategic collaborations. Article 145 of the Industrial Property Law regulates the potential of licensing agreements to create collaborations and generate new business opportunities.

Increased Revenue: Licensing agreements provide the licensee with an additional source of income. License fees and royalty payments increase the value of intellectual property rights. Article 146 of the Industrial Property Law specifies how these payments are calculated and applied.

Market Share: Exclusive licenses provide the licensee with a specific market advantage. Article 147 of the Industrial Property Law regulates the effects of exclusive licenses on market share and competitive advantages.

Competitive Advantage: Mergers enable businesses to acquire new technologies or brands. Article 148 of the Industrial Property Law explains how mergers can affect competitive advantage and be used strategically.

Risk Management and Legal Assurance

 

• Risk Management: Licensing and transfer processes ensure the effective management of intellectual property rights. Article 149 of the Turkish Trademark Law regulates how risks should be managed and how risks arising from intellectual property rights should be minimized.
• Legal Protection: License and transfer agreements provide legal guarantees between the parties. Article 150 of the Industrial Property Law protects the legal validity of the agreements and the rights of the parties.

Conclusion

Licensing and transfer transactions in intellectual and industrial property rights ensure the effective use and management of these rights. While licensing agreements, in their various forms, impose different rights and obligations on the parties, transfer transactions regulate the transfer and registration of intellectual property rights. In practice, these transactions are of great importance in terms of strategic collaborations, revenue growth, market advantage, and risk management. The Industrial Property Law (SMK) defines the legal framework for these processes and safeguards the rights of the parties. Careful management of these processes by the parties is critical for both legal and commercial success.

Student Intern 

Behiye Zeynep Ozturk