You need to know if a patent has been granted or if it is only being examined and/or if an application is filed. Since the future use of a patent depends to a large extent on its legal status, licensees are entitled to complete and detailed information on the status of the patent. Therefore, the first reasonable guarantee expected of a licensor is that a patent exists and is legally valid. Of course, a patent cannot yet be granted, but only filed or applied for. In this case, the licensor should guarantee the exact and described legal status of its patent application or “open for public consultation”. If a patent has been granted, the licensor should also ensure that it has the free right to grant the patent licence, that there are no mortgages or pledges from third parties on patent law, or that the patent is not subordinated to an earlier patent or utility model. If there is a right to use the patent in conformity with the patent”, the licensor is supposed to inform the licensee. An essential feature of patents is that they are only valid in countries where they have been duly registered. Safeguards relating to the legal status of a patent should include the obligation for a patent holder to register the patent in the territory where a licence is granted and to maintain its registration.
A patent can be invalidated and revoked if it is established that the technology is not new and that no patent protection should be granted. In this case, the licensee may terminate the contract; it would not be justified to continue to pay a fee for an invention without a patent. However, the question remains whether a licensor must justify the novelty of his invention. The question of who will bear the risk of the expenses incurred by the licensee during the period preceding the withdrawal of the patent must also be answered. The Annex contains 24 model clauses, often found in technology transfer agreements. They should not serve as “good” or “bad” examples. Of course, clauses that tend to reduce or completely eliminate the licensor`s guarantee should be viewed with caution by licensees. Four such clauses are presented in order to make them easily identifiable when they are part of the contract proposals. As a general rule, a licensor is not responsible for the future validity of a patent, but the parties may consider the consequences of a subsequent cancellation of a patent. In such cases, the usual means is termination of the contract and most licensors would not assume any liability for damage.
The license agreement remains operational until the patent is finally revoked; the mere risk of cancellation of a patent does not necessarily entitle the licensee to terminate the contract (Annex, example 5). The cost of maintaining a patent is usually borne by the licensor. On the other hand, in the case of an exclusive patent, the licensor may require the licensee to maintain the patent. . . .