Implied Licences of Intellectual Property

20th December 2017
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Implied Licences of Intellectual Property

An implied licence of intellectual property (IP) will arise when the IP owner gives unwritten permission to another to use that IP. An implied licence is distinct from an express licence, which will usually be some form of written permission or formal licence agreement.

Implied licences are a risky business. For the party acquiring the licence it could put them at risk of infringement. For the party granting the licence it could restrict their ability to control the activities of others with respect to their IP. Uncertainties will invariably arise as to the scope and extent of an implied licence; for example, whether the licence is to be used exclusively or whether it is indefinite or only for a certain period of time.

The Court’s Approach

Where a licence is implied and therefore unwritten, the licence terms will not usually be clearly set-out. This means that, if the matter becomes contentious, a court will be asked to determine the licence terms based not on a single conveniently available documented agreement but on the wider facts of the case, including what the parties may have said to each other verbally. This could result in a different outcome to what one or all of the parties to the implied licence may have intended. As a general rule, the courts are reluctant to imply terms into any form of contract and will only look at and interpret a licence through the eyes of a reasonable person.

Helme & Others v Maher & Another [2015] EWHC 3151 (IPEC)

Helme v Maher was a case decided in the Intellectual Property Enterprise Court. The claimants, owners of a jewellery business and its associated intellectual property, entered into discussions with the defendants about a joint venture which never materialised. In preparation for the venture the defendants took steps that required use of the claimant’s intellectual property, such as running advertisements and registering a website domain. The claimants claimed that the defendants’ use of their intellectual property constituted passing off and/or copyright infringement.

It was common ground that the claimants had granted the defendants a licence and the question before the court was the terms and extent of that licence. It was held that a broad licence was granted and the common intention of the parties at the time the licence was granted was to cover any use that advanced the joint venture. This is because, at the outset, the parties enjoyed a good working relationship and during this time the defendants’ use of the intellectual property was wide. Whilst that relationship may have later soured, it is what the parties had originally intended (when their relationship was good) that was used as the basis of interpreting the terms of the licence.

Intellectual property is a valuable asset and preferably any permission or licence to be granted will be done so expressly and in writing and drafted professionally so as to contain all the relevant licence terms. South Bank Legal is a firm of London solicitors specialising in intellectual property protection and dispute resolution. For a confidential discussion about any the issues discussed above please contact us.

Intellectual Property & Technology