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Sep 02, 2012
Luke Kempton, Wragge & Co LLP, United Kingdom
Peter Koch, Wragge & Co LLP, Germany
First published on www.lexology.com

Does a sub-licence continue after its head licence term...


Luke Kempton, Wragge & Co LLP, United Kingdom, Peter Koch, Wragge & Co LLP, Germany, First published on www.lexology.comThe German Federal Court (Bundesgerichtshof, BGH), the highest civil court of last resort in Germany and so with a similar status to the UK's Supreme Court, has handed down two decisions which preserved the validity of a sub-licence upon the termination of the head licence. The decisions are in line with one the court made in 2009 on the same issue.
The court reached its decision on the basis that each sub-licensee had made investments based on its licence. It also considered that as the sub-licensees could not influence or foresee early termination of the head licence, they should therefore have the right to continue using the intellectual property rights concerned under the terms of the sub-licence. However, while the sub-licence continues, any royalty payments made by the sub-licensee will be paid to the head licensor rather than to the head licensee. read more