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Newsletters and Bulletins / November 1994 / France |
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France - Payment of Royalties on Patent and Know-How Licenses In a 1990 decision in the case of Pestre v. Oril SA, which has only
just been reported in English, the Paris Court of Appeal was confronted with
the question of enforceability of a license agreement which required payment of
royalties under a patent and licensed know-how necessary to work the patent for
a period of 50 years. The license did not distinguish between royalties
payable before and after the patent expired. The evidence showed that the
know-how transferred was an important part of the package, this being confirmed
by the fact that, even after the patent had expired, no competitors entered the
market. The court concluded that under the circumstances the 50-year royalty
payment was merely a payment facility for the benefit of the licensee which
would otherwise have had to pay more at an earlier date; therefore the contract
was valid and remained enforceable. The Court concluded that the agreement was
not in conflict with free competition because the product itself (which was an
antibiotic) was subject to competition with other similar products in the
market. |
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