Post-termination use of licensed intellectual property by licensees

Legal and practical context: The ongoing dispute between Nokia and Qualcomm exemplifies thecomplex issues that arise when the licensor–licensee relationshipbreaks down. It illustrates that any means by which a licenseecan secure rights to use licensed IP after termination of alicence agreement can be of great commercial importance, notto mention significant economic value. If a licensee can continueto use licensed IP notwithstanding that its agreement has beenterminated, a licensor's ability to control and derive maximumeconomic benefit from its IP may be fundamentally compromised. Key points: The means available to licensees to secure such rights varydepending on the kind of IP right licensed, but there are severalcommon themes, which draw on a diverse range of legal rulesand concepts, including specific IP concepts and laws (includingthe rules relating to assignment and licensing, the exhaustionof rights, revocation and invalidation, and defences to infringementclaims), contract law and competition law. This article discussespractical implications to be considered when drafting IP licenceagreements. Conclusions: From a licensee's perspective, the termination of its licenceagreement is not necessarily the end of the road. Licenseesshould be aware of these post-termination rights when expectingto face difficult renegotiations with a licensor. From bothparties' perspectives, but particularly that of licensor, thisarticle should demonstrate the importance of drafting to avoidany uncertainty that may arise on the termination of a licenceagreement.