1. Intellectual property rights are independent assets that can be sold (assigned) or licensed to third parties. This not only includes patents, trade marks and designs, but also non-registered rights such as copyrighted works, know-how, confidential information and trade secrets.

2. There are various types of intellectual property licenses, for example:

• • Sole license – is where only the proprietor of the intellectual property, as well as the sole licensee, is authorised to enter the market.
  • Exclusive license – is where only one licensee has the right to enter the market to the exclusion of all others, including the proprietor of the intellectual property.
  • Non-exclusive license – is where multiple licensees have the right to enter the market, as well as the proprietor of the intellectual property.
  • Cross-license – is where proprietors of different technologies or intellectual property rights cross-licence each other.

3. A proprietor can derive remuneration from a licence in a number of ways, for example:

• • A once-off licence fee/royalty.
  • Periodical licence fee/royalty (e.g. annual, quarterly or monthly).
  • A running royalty based on sales/turnover etc.

4. Please be aware that when South African intellectual property rights are assigned or licensed offshore, the South African Exchange Control Authorities must approve the value of the agreement before it is signed.

5. In view of the potential value of intellectual property rights, it is advisable to sell or license such rights under cover of proper legal agreements. An assignment of or license in respect of registered intellectual property rights (i.e. patents, trade marks and/or designs) should be recorded on the official records at the Companies and Intellectual Property Commission (CIPC – i.e. the South African patent and trade mark office).  We can assist you with the following non-exhaustive intellectual property agreements, tailored to your particular industry:

• • Confidential Disclosure agreements
  • Licensing agreements
  • Assignments (sale agreements)
  • Joint Development and Strategic Alliance agreements
  • Research and Development agreements
  • Manufacturing, Supply and Distribution agreements
  • Software Development and Licensing agreements

6. We strongly recommend that formal licence agreements be entered into to regulate the rights and obligations of the contracting parties. Important considerations to be addressed in such agreements include, without limitation, licensing and payment options and accompanying auditing obligations, geographical limitations, industry-specific limitations, time periods, supply and distribution channels, minimum performance requirements, obligations regarding enforcement of IP rights in case of third-party infringements, marking of products or services with official intellectual property numbers, ownership and assignment of improvements upon registered intellectual property, limitations regarding reverse engineering and unlawful competition, etc. 

Please contact us if you require more information on the various considerations and technicalities applicable to IP license and assignment agreements.