The licensee does not cede its rights or obligations arising from this agreement or any of the intellectual property rights granted under this agreement without prior written notification to the taker. The main difference between the two agreements is that a license allows the licensee to maintain its rights and interest in its IP address, while a transfer transfer transfers all the rights of the agents to their IP address and entrusts them to the agent. As far as payment is concerned, an assignment involves a one-time and guaranteed payment to the agent at an agreed price. A license includes a long-term payment to the licensee, but with an uncertain price. A license potentially allows unlimited future revenue. Another key difference between the two agreements is the requirements for their implementation. In particular, it is necessary to enter into a transfer agreement that must be submitted and registered with the United States Patent and Trademark Office Assignment Recordation Branch. A licence is less strict and can be granted orally. The best method would be to have a negotiated and signed license, but unlike the transfer, a registration of the agreement is not necessary for applicability. This was the clause in a licensing agreement for a patented waterproof zipper between YKK Corp.

and Au Haven LLC, the patent holder. YKK negotiated an exclusive license to manufacture patented zippers for a sales license. A number of contracts have granted ownership of the patent to a new owner, Trelleborg. However, YKK did not accept the transfer of the patent to Trelleborg. The new owner then joined Au Haven and both sued YKK for breach of patent licensing agreement and infringement of the patent granted. None of the parties to this agreement will sublicensing, subcontracting or transferring any other party, nor will they transfer or delegate their rights or obligations under this Agreement, without the prior written consent of the other party. Such an attempt to transfer, subcontract, sublicensing or transfer of it is null and void and has no force or effect. This agreement binds the parties and their respective rights holders and heirs and applies in the interest.

[Added highlight] Both licensees and licensees should ensure that the consequences of the transfer of their licence are taken into account, if the transfer by the licensee or licensee is authorized and whether the transfer of the underlying patent should be controlled under the agreement. Unless the licensing agreement indicates that the licence is “personal” or that a clause is contained in the agreement limiting the right of one party to cede rights and obligations under the licence, one party is free under Canadian law to cede its rights to the agreement, but cannot relinquish its obligations without the consent of the other party. YKK responded and argued that Trelleborg (the patent holder) did not have the authority to take legal action, as the alleged assignment under the above clause had never been obtained, as YKK`s consent had never been obtained: “Such an attempt, subcontracting, sublicensing or transfer of it is null and void.” (Added highlight) In other words, YKK argued that, as the attempt to transfer the patent had taken place without consent, it was not an effective assignment, so Trelleborg was not the legitimate holder of the patent and therefore had no right to sue for infringement of that patent. The court considered this decision in the recent U.S. decision to Au New Haven LLC v. YKK Corporation (US District Court SDNY, September 28, 2016) (Huttipp an Finnegan). The Tribunal rejected YKK`s arguments and found that the clause did not prevent the assignment of the underlying patent or invalidate the assignment of the patent, since the clause prohibiting only the assignment of the agreement and any interest in the agreement and the assignment of the patent itself did not explicitly mention the assignment of the patent itself.

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