In one case last year, the High Court included certain bona foi obligations in a distribution and licensing agreement for toiletries.6 6 It was obligatory not to under-contribute the prices excluding taxes and not to knowingly give false information. The case shows that the courts are willing to include certain bona foi obligations in a licensing agreement, such as honesty, cooperation, the non-arbitrary exercise of contractual discretion and not against any established sectoral assumptions. A license often indicates whether the licensee can sublicense to third parties. If the licensee grants a sublicense to a third party, what will happen if the head license is terminated? Can the third party continue to exercise the rights? For example, in France, there is a concept of “inappropriate cessation of negotiations” or “abusive termination of talks”. This power allows, in certain circumstances, a party to claim damages for losses caused by the fact that another party abruptly terminates negotiations if the first party correctly believed that such negotiations would lead to an agreement. French law imposes an obligation of good faith, so that there is an infringement if one of the parties incorrectly interrupts the negotiations without having a good reason to do so. A trademark may be used for lottery purposes if it has not been used in the last five years. Fortunately, use by a licensee usually constitutes the use of a trademark for these purposes. However, be prepared to provide proof of use as part of the license. This problem arose recently before a person appointed to the Uk Intellectual Property Office1. In this case, the licensee submitted license agreements as proof of use. The person ordered found this insufficient.
He noted that the licensor should have provided details of the licensing turnover. . . .