Domestic and Global Contexts
Elgar Law and Entrepreneurship series
Edited by Lynda J. Oswald and Marisa Anne Pagnattaro
Chapter 9: Patent grant-back clauses in international license agreements: a survey and ethical analysis
This chapter will examine the topic of patent grant-back clauses in international patent license agreements. These clauses, which have greatest applicability to independent contractor agency relationships, have the potential to restrict innovation and violate international legal and ethical norms. Several international treatments of this issue will be examined to find a compromise that tempers the negative impacts of overly broad and restrictive grant-back clauses. A sample clause will then be offered as a compromise that represents an ethical solution that takes international norms and cultural differences into account. A patent is a set of exclusive rights granted to applicants for inventions that meet standards of novelty, non-obviousness, utility and full disclosure. A patent grant-back is a contract term in a patent licensing contract that legally obligates the party licensing the technology (licensee) to transfer ownership of any improvements that the licensee makes with respect to the licensed technology back to the patent owner (licensor). This practice raises several interesting issues related to business strategy, international trade law and ethics. Each of these issues will be examined in this chapter. In its broadest form, a patent grant-back extends to any improvement that relates in any way to the licensed and patented technology. An improvement patent builds from a prior patented technology and a license is required by the licensor to practice the improvement.
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