Urgent query on ipr
Gargi Ranade
(Querist) 23 February 2012
This query is : Resolved
Dear All,
We are manufacturers of Capital Goods ( Machines). We are about to eneterd in to Sale Purchase Contract with one of our customer.
Customer has put obligation on us relating to Transfer of Intellactual Property in Machine.
I believe that mere sale of machine does not give any right to customer to own Intellactual property rights of the Machine. However, he can surely put obligation for transfer of clear title in machine.
kindly clarify this issue, Does sale of Machine amounts to transfer of Intellactual Property Rights in the same???
Regards,
Gargi
Guest
(Expert) 23 February 2012
Please clarify, what actual intellectual property right the customer desires to be transferred to him, i.e., brand name, goodwill, copyright of machine design, patent name, your company's name, etc.?
adv. rajeev ( rajoo )
(Expert) 23 February 2012
Sale of machine does not amounts to transfer of intellectual property rights. It is a sale only.
Gargi Ranade
(Querist) 23 February 2012
Sir,
we are producer of Machines which are used to produce PET bottles which are further used in the packging of the products
While manufacturing machines, though basic technology remains same , molds are prepared as per bottles design specification.
It seems while mentioning IPR he has used this term in different sence . Pleas read the below para which will clarify what he means actully.
a) SELLER agrees and acknowledges that the Intellectual Property Rights are and shall be the exclusive property of BUYER as the work is being done at the instance of BUYER for valuable consideration in respect to any and all countries and their territories and BUYER is and shall be the sole and absolute owner thereof and SELLER will not sell, trade, disclose, give or intentionally or unintentionally make available any of the Intellectual Property Rights to any private or public individual, corporation or other entity, or any person and will take all reasonable precautions to prevent the illegal or unauthorized use of the Intellectual Property Rights.
b) SELLER shall assign and transfer to BUYER, all copyright, title and ownership and other intellectual property rights, whether registered/ granted or not (the “Intellectual Property Rights”), in Deliverables and the Services including but not limited to design concepts for packaging, structures of design concepts, research material, photographs, models of bottles or closures, layouts, light refinements, digital files, artwork, plans, tracings, drawings, designs, calculations, sketches, reports, specifications, computer assisted design documents, results of programs, charts and the contents of any of them in connection therewith whether finally selected or not by BUYER.
Deepak Nair
(Expert) 23 February 2012
Are you entering into agreement with a dealer/agent or the end user??
In any case, sale of a product cannot transfer the IPR of seller to the purchaser. For transfer of the IPR, an agreement for transfer and assignment have to be executed.
In your case, such a clause is void and i suggest you to remove that clause.
If the purchaser is an agent/dealer and not the end user, then you can permit the purchaser to use your IPR such as Trade Mark or Copy Right for the purpose as provided in the agreement.
Gargi Ranade
(Querist) 23 February 2012
Dear all,
Thanks for your prompt reply and for clarifying my doubts in such a unambiguous way.
I will stick to my stance and will ask them to delete this complete clause.
I once gain thank All Experts , who always clarify my doubts which I come acroos while handeling legal area.
Gargi Ranade
(Querist) 23 February 2012
Deepak Sir,
Custommer is end user of the machine and he is no way related to us.
Actully we are working as a subsidiary company of head quarter who has develop the technology. So in fact we ourselves does not own the IPR in technical know how but HQ has just given us non- exclusive licence to use the technology and name for production of machines.
Guest
(Expert) 23 February 2012
Great trick seems to have been played by the buyer to acquire all types of intellectual property rights by entering in to such a devastating clause. One day, you would be nowhere, if he starts manufacturing by using copyright, trademark, registered patent, etc., of the product.
prabhakar singh
(Expert) 23 February 2012
The end user can not claim IPR or Copy Rights.
Moreover you can not agree to surrender or transfer or assign any right, title or interest which you do not have.Hence the proposed clause is redundant and should be scored out.
Deepak Nair
(Expert) 24 February 2012
You are a licensee of the IPR and you have no right to transfer the same to any other. Thus such a clause will be illegal. Therefore better to remove the same.
Dr V. Nageswara Rao
(Expert) 24 February 2012
As usual with many, you are consulting after the event--after entering into a very unwise agreement. You are selling a product and not its IPR.True, customer gets the right to use the product for personal purposes, as for instance a music CD or DVD and that use is not a violation of your IPR. But you should not sell IPR in your product unless you want to. As in the case of Copyright, you may sell publication rights only but not copyright as such unless you want to sell that also.
Anirudh
(Expert) 24 February 2012
Dear Dr. V.N.Rao,
I fully agree with you.
These are all penny-wise companies. Do not want to spend where necessary - but try to save, while in reality they lose heavily.
Deepak Nair
(Expert) 25 February 2012
Dear Mr.Rao,
In the present case, the seller is only a licensee of the IPR and they have no right to sell the IPR, but use it as per the terms and conditions of license granted.
The clause of IPR in the present case is void and the same will make the agreement illegal.
Gargi Ranade
(Querist) 25 February 2012
Thanks to all Expert for their valuable opinions.
@Anirudh Sir, Its not question of being Penny wise, but this is normal sale purchase agreement for which generally we insist on format prepared by our company. there are only few cases where buyer insist on their format. In such cases by all means we ensures that clauses are not harmful to us. even in my query itself I have mentioned my own opinion first.Thanks for your contribution.
