Usually, an intercompany transfer and license agreement stipulates that all intellectual property rights developed by an operating company (e.g. a trademark, patent, a copyright protected work (e.g. software)) and know-how are always automatically transferred to the group company in which the intellectual property rights and know-how of the group companies (usually the holding company or a separate IP company) are located, where through a so-called 'grant-back license' a right of use in respect of these and possibly other intellectual property rights is granted to the operating company.
The content of an intercompany transfer and license agreement
Because Dutch contract law is based on freedom of contract, parties are free to agree with each other what they want. However, you will almost always encounter the following subjects in an intercompany transfer and license agreement:
- Which intellectual property rights are transferred by the operating company?
- Which intellectual property rights are licensed to the operating company (via a 'grant back license')?
- For which products, markets and territories does the license under the license agreement apply?
- Is the licence (agreement) exclusive or non-exclusive, conditional or unconditional, temporary or perpetual, non-licensable or sub-licensable?
- Liability, warranties and indemnities;
- What is the term of the license and the license agreement, and on what terms can the license agreement be terminated?
Benefits intercompany transfer and license agreement
In the case of an intercompany transfer and license agreement, a fee (royalty) can be agreed for the license under the intellectual property rights as well. This enables the income per company within a group to be optimally tuned. In addition, the use of intercompany transfer and license agreements from the group company to which the intellectual property rights and know-how are assigned makes it easier to provide (broader) licenses to other operating companies or third parties, makes it easier to attract investors and keeps the intellectual property rights out of the risk sphere (e.g. in the event of the bankruptcy of an operating company). An intercompany transfer and license agreement can also entail tax advantages.
If you would like support in drawing up and (internally) negotiating a workable and legally clear intercompany transfer and licence agreement, please contact us. This does not result in any further obligations for you.