Short Form IP Licences – What are they and why do you need one?

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What is a short form IP licence?

A short form IP licence is exactly what it sounds like – it is an agreement which does not incorporate the full range of clauses that would normally be included in an IP licence. Particular clauses are shortened or simply removed altogether. For example, the standard boiler plate section that lawyers usually insist on including in every agreement (for good reason I’d like to protest in our defence!) is omitted and commercially sensitive terms are stripped from the document. The result is normally the bare bones of what you might consider to be a licence, setting out details of the parties, what is being licenced and then referring you to the main licence agreement for pretty much everything else.

Why might you need one?

All well and good I hear you say, but what’s the point of a shorter licence if we already have the main licence agreement in place? Well, the answer is registration, or ‘recordal’ if you want to use the fancy legal term. Although there is no statutory requirement that licences should be registered, registration can give some significant advantages to licensees that it is important to consider – and you want to be able to benefit from these without publicising to the world (particularly your competitors) the commercial terms of your agreement. In such circumstances, a short form licence can be recorded in place of the full agreement, providing the licencee with the advantages of registration, whilst protecting the confidentiality of the parties’ commercial arrangement.

What are the benefits of registration?

The main advantage of registration is protection – it puts third parties on notice of your licence. This ensures that any third party (e.g. assignee or licensee) who subsequently acquires rights in the subject matter of the licence will be bound by your interest. In other words, it gives constructive notice of your rights so that they cannot argue they were not aware of your licence. If you don’t register, then such third parties will not be required to honour the terms of your licence unless they had actual knowledge of it.

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Why are they useful?

Ok, all fine so far, but why shouldn’t you overlook UDR – there seems to be a good deal of overlap with other IP rights, so what are the advantages? Well essentially it provides protection in an area where copyright can’t help you. UDR can protect 3D products which aren’t deemed to have the necessary aesthetic quality to be considered “artistic works” for the purposes of copyright. And whilst registered design right can obviously also be useful, this involves application costs that you might not be willing to fork out. In addition, some jurisdictions will not accept applications for registered designs that have been disclosed before the application was made, and although the UK and EU both have 12 month ‘grace’ periods, these deadlines can be easily missed. As UDR has no registration requirement, there is no risk that you will lose your rights by forgetting to register.

If that isn’t enough to convince you, an example of one scenario where UDR can play a useful role might sway you – copycat products. These can be a nightmare for businesses who have invested significant amounts in their branding and marketing campaigns. But often trade mark rights can be ineffective to prevent a lookalike from reaching the shelves. This is because in the vast majority of cases consumers are simply not confused by copycat products, and are well aware that the item they are purchasing is not the branded product. UDR can step in to fill this gap in protection as there is no requirement for confusion on the part of the public. You simply have to prove that your design has been copied – which a copycat product by nature will almost inevitably have done.

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