Industrial Property Law

If a license agreement is a definitive contract and not a mere promise to license , the licensee is obliged to exploit the patent. Failure to comply with this essential obligation may result in termination of the license  at the licensee's sole risk, and in the licensee being ordered to pay damages to the licensor . Thus, a licensee who fails to demonstrate that he has used all the means at his di …

Obligation to exploit the patent

If a license agreement is a definitive contract and not a mere promise to license , the licensee is obliged to exploit the patent. Failure to comply with this essential obligation may result in termination of the license  at the licensee's sole risk, and in the licensee being ordered to pay damages to the licensor . Thus, a licensee who fails to demonstrate that he has used all the means at his disposal to exploit the invention within the period stipulated in the contract is not fulfilling this obligation .

The licensee must exploit the invention personally. He may only sublicense or transfer the license with the consent of the licensor. In the absence of such agreement, any contract to sublicense or assign the license is null and void, and the liability of the licensee is thereby incurred under the terms of the contract. If the licensee undertakes to pay fees proportional to the results of his or her exploitation, the invention must be fully exploited to the maximum of his or her means and faculties .

A licensee sued for failure to exploit a patent may justify non-compliance with the obligation by proving the existence of insurmountable technical or commercial difficulties which prevented development or commercialization of the patented invention . This is the case when the invention can only be realized in a laboratory, or at prices that prevent access to the market . On the other hand, defects discovered before the contract was signed cannot be relied upon, since it was up to the licensee to decide whether or not to enter into a contract, in the light of his knowledge of the product and its possible defects .

The licensee must, however, respect the limits of the license granted. Any unauthorized act of exploitation constitutes an infringement (Article L. 613-8, para. 3, IP Code). Such is the situation when the licensee makes unauthorized changes to the patented objects  or continues to manufacture and market them after termination of the licensing agreement .

Cass. com., 17 February 1982, LawLex202200003066JB, which states that when the promise to grant a patent license does not include any provision obliging the licensee to exploit the patent before the conclusion of the definitive agreement, the promisor cannot reproach the licensee for insufficient exploitation in order to refuse to sign the agreement.

CA Paris, 2 June 1988, Samex v Intermas, D. 1988, IR, 202; PIBD 1988, 445, III, 544.

CA Paris, 7 April 2004, LawLex202300002993JBJ.

CA Paris, 7 April 2004, LawLex202300002993JBJ; CA Paris, 2 June 1988, Samex v. Intermas.

CA Paris, 2 June 1988, Samex v. Intermas, D. 1988, IR, 202; PIBD 1988, 445, III, 544.

CA Paris, 22 June 2018, LawLex202300002985JBJ, which states that the licensee's choice to contract but not to implement the exclusive license for the entire world he acquired without warning or giving formal notice to his co-contractors is wrongful.

Cass. com. 10 October 2000, LawLex202200003064JBJ, concerning an undertaking which replaced the modular elements of a mattress with modules supplied by third parties, even though it was only authorized to amend their arrangement in order to adapt them to customer requirements.

CA Paris, 4 June 2019, LawLex202300002994JBJ.

Industrial Property Law

332. Obligation to exploit the patent

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332. Obligation to exploit the patent

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise