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Intellectual Property and Commercial Court

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2010 Min Zhuan Su Zi No. 191

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Decision No. 2010 Min Zhuan Su Zi No. 191
Date July 5, 2011
Decision Highlight

A so-called patent licensor is a licensor who grants to a licensee all or part of the patent right, where under the license scope, the licensee enjoys the patent right related to that license scope. Therefore, patent licensing and patent ownership transfer are different, because a licensee eventually does not acquire a status or position as a patent ownership and only has a right to practice the patent. That is, the main obligation of a patent licensor is to allow a licensee to practice the patent right according to the licensing contract during the patent licensing period, and the patent licensor does not have any obligation to transfer to the licensee the title of the patent right. Assume a licensee is in the licensing period. A licensor follows purposes of the patent licensing contract to allow the licensee to practice the patent right according to the contract. Though, the invalidity judgment of the patent right is final so that the patent right is considered to have never existed and cannot be practiced continuously. However, unless the subject matter of the contract would not have been performed since the beginning of the contract, the contract should be deemed to be valid. During the period of practicing the patent right, the licensee should follow the contract to pay the loyalty fee. Because patent licensing is a bilateral contract, both parties have an obligation of performance. So, the plaintiff’s payment of the loyalty fee and the technology supplied by the defendant, both for economic purposes of exchange, constitute the entirety of the patent licensing contract at dispute and are not separable. So, although the patent at dispute has been withdrawn, which is final in record, since both parties in fact have performed their contract duties, performance and corresponding performance together should be taken into consideration in calculations. If the loyalty fee paid by the plaintiff is equal to the technology supplied by the defendant and if the content of the patent licensing contract at dispute is fulfilled, it is hard to say that the defendant acquires unlawful enrichment by receiving the loyalty fee. Therefore, the defendant followed the licensing contract and requested the plaintiff to pay the loyalty fee, while the plaintiff did get benefits because of applying the technology supplied by the defendant. Although the paten at dispute was then withdrawn because of an opposition, however, that does not impact the validity of the licensing contract between both parties. And, when the plaintiff gave the loyalty fee to the defendant, the defendant granted to the plaintiff the patented technology valid at that time and the patent right until the use was done, the corresponding performance was finished. As a result, the defendant has a legal ground to receive the loyalty fee.

Keywords

Patent licensing, patent ownership transfer, practice of a patent right, withdrawal by opposition, unlawful enrichment

Relevant statutes Article 67, Paragraph 1, Article 6, Paragraph 1 of the Patent Act, Article 179 of the Civil Code
  • Release Date:2020-11-13
  • Update:2020-12-07
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