Licensing or assigning your intellectual property rights (such as trade-marks, copyrights and patents) to other companies can generate lucrative license fees and royalties but it can also be a minefield. To protect yourself, it is imperative to get these licensing and/or assignment arrangements in writing so as to avoid costly litigation in the future.
Last month, the British Columbia Supreme Court found in favour of the plaintiff, Mr. Gatter who had assigned his rights to his invention to the defendant and, under an oral agreement, the parties agreed that Mr. Gatter would be paid a three percent royalty on the manufacturer’s selling price for the use of his invention. Subsequently, the defendant licensed its patent in the invention to a third party and received a payment for each unit the third party manufactured and sold. Over time, the defendant received more than US$1.3 million pursuant to the patent licence agreement. Mr. Gatter sued for damages. The Court held that the parties’ oral agreement for payment to Mr. Gatter of a royalty for the defendant’s “use” of the invention, in fact, did require the defendant to pay the plaintiff’s royalty on all units manufactured and sold by the third party.
If Mr. Gatter had had a written agreement in place in the beginning that addressed these issues, then he could have been entitled to these royalty fees automatically without incurring the additional expense and stress of going to Court to enforce an oral agreement.
If you have any intellectual property issues, whether it be licensing or assigning your intellectual property rights, you should always consult a lawyer to ensure your rights are protected and you are being adequately compensated.
Vanessa DeDominicis is a Registered Trade-Mark Agent and can be contacted at (250) 869-1140 or [email protected]
