Licence and franchise agreements

A.

TEXT

In the age of integration and trade globalisation new unconventional forms of cooperation have come into being in recent times' to promote busi­ness universally.²

Nowadays hardly any industrial country has sufficient human, material, logistic³ resources, research and development to encourage a full-scale pro­duction.

Therefore, private companies, public agencies tend to buy patents, li­cences and know-how, associated licences, to be able to use new processes and techniques. Some of them prefer doing it through engineering com­panies.

Recently franchise agreements⁴ have also become popular. Under these agreements a monopoly producer, the franchisor,⁵ sells a special right to another producer or a trader, the franchisee,⁶ to manufacture or sell the prod­uct of the franchisor in a certain area, town or a country. The franchisee in this case uses the trademark⁷ and the brand name⁸ of the franchisor.

Here is an example of correspondence and business talks of licence trade.

October 5, 20... Dear Sirs,

It is our intention in the near future to establish a modern, reliable and safe manufacture of Surface Pump Units for oil-well. We are therefore inter­ested in contacting a number of Licensors with a view to choosing lines suitable for us.

Through your representative in this country ⁹ we learn that Firm... has developed a production process to manufacture the above equipment, accu­mulated sufficient knowledge and experience in the field and is willing to transfer it to a third party at a reasonable cost.

Indian Pumps, Ltd., a state enterprise, intends to build up a market for Surface Pump Units in the country with a view to exporting them in the future.

To this end we would like to obtain from the Licensor design and techno­logical documentation, know-how and consultations on our personnel train­ing, both in this country and Russia.

Machine building enterprises for the production of Surface Pump Units and raw materials are fully available in the country. We also have a compe­tent engineering firm which can give consultations if necessary.

In view of the above we would like to receive an offer from you for obtain­ing a licence, know-how and related services in the volume required for the manufacture of Surface Pump Units.

We look forward to hearing from you.

Yours faithfully,

October 20, 20... Dears Sirs,

We thank you for your letter enquiring about our manufacture of Sur­face Pump Units and requesting terms for a licence agreement. It arrived at a very opportune moment since we have been considering extensions of our export field for some time.

We are ready to send you an offer for the sale of a licence, but we would appreciate very much details with regard to the type of licence you would prefer, the range of our obligations, your idea of the project capacity, mode of payment, duration of the agreement and a Licensor's fee.

As soon as we are in possession of the details, we shall forward to you a Draft Licence Agreement.

Your own proposals may be included in it but our understanding is that a non-exclusive licence will suit your purpose best of all.

We are giving your enquiry priority,¹⁰ but we would appreciate a prompt reply so that we could count you out if you are not interested."

Yours faithfully,

B.

Дата добавления: 2015-07-08