Theory and practice of intellectual property
№ 6 / 2022
ISSN (Print) 2308-0361
ISSN (Online) 2519-2744
PDF (Ukrainian)DOI: https://doi.org/10.33731/62022.274616
Published 2022-12-16
Unilateral withdrawal from a license agreement
Anna Shtefan
Ukraine
https://orcid.org/0000-0003-2382-4849
Abstract
The right to the unilateral withdrawal of a license agreement is formulated in Part 2 of Article 1110 of the Civil Code of Ukraine in a generalized form, leaving outside the legal regulation a number of important issues that are significant for the effective application of this provision. In particular, what should be the duration of the delay in the term of beginning the use of the object of intellectual property rights, whether the licensor should provide the licensee with an additional term to start using this object, what is the nature of the violation of the terms of the license agreement that allows for a unilateral withdrawal from it, in what form such a withdrawal should be made and from what moment it can be considered committed. These aspects remain almost unexplored, which determines the relevance of their scientific and practical analysis. The purpose of the article is to provide a comprehensive characterization of the right to unilateral withdrawal from a license agreement and the mechanism for its implementation on the example of copyright, taking into account the provisions of the legislation of the EU Member States.
Unilateral withdrawal from the license agreement is an extrajudicial procedure that is carried out by written notice of the interested party to the other party. Unlike the laws of many EU member states, the Ukrainian legislation does not specify the duration of the delay in the use of the work by the licensee and does not establish the obligation to grant the licensee an additional term to start using the work, and therefore, the parties may regulate these aspects at their own discretion. The absence in the license agreement of a date or period within which the licensee must start using the work gives the licensee the right to independently determine the moment of the work’s use and deprives the licensor of the opportunity to withdraw from the license agreement on this basis. It is substantiated that breach of contract may relate exclusively to the obligations of a party under a license agreement, but not to its rights, since the law does not provide for the compulsory exercise of the right to use a work.
Based on the experience of the EU Member States, it will be useful for Ukraine to provide in Part 2 of Article 1110 of the Civil Code that the general prerequisite for the right to unilateral withdrawal is the proper and timely performance by the party committing the withdrawal of its obligations that determine the possibility of performance of the agreement by the other party. This will contribute to the stability of contractual relations in this area and will prevent potential abuses, in particular, the exercise of the right to unilateral withdrawal from the license agreement in order to harm the interests of the other party. Also, in Part 2 of Article 1110 of the Civil Code, it is advisable to establish that a unilateral withdrawal from a license agreement shall be made in writing and shall be deemed to be made from the moment a party receives notice of the other party’s withdrawal from the agreement unless a later term is specified in the agreement or notice. This will properly clarify the unilateral withdrawal procedure and facilitate its more effective application in practice.
Keywords: license agreement, unilateral withdrawal from an agreement, copyright, intellectual property
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