CLP CLP International Licensing 2

Question 1

What is a compulsory license in international IP law?

Accepted Answer

A government-authorized license allowing a third party to use a patent without the owner's consent, typically for public health reasons

Answer

A compulsory license is issued by a government to allow production of a patented item (e.g., medicine) without the patent holder's permission, permitted under TRIPS in specific circumstances.

Question 2

In international licensing, 'choice of law' clause designates:

Accepted Answer

Which country's laws govern the interpretation and enforcement of the license agreement

Answer

A choice-of-law clause specifies the governing jurisdiction's laws, which is critical in cross-border deals where countries have different contract and IP rules.

Question 3

Transfer pricing rules in international licensing require that intercompany royalties between related entities be set at:

Accepted Answer

Arm's-length market rates as if the parties were unrelated

Answer

Tax authorities in most countries require that royalties between affiliated companies reflect arm's-length pricing to prevent profit shifting to low-tax jurisdictions.

Question 4

The European Union's exhaustion doctrine in trademark and patent law holds that:

Accepted Answer

Once a rights holder sells a product within the EEA, IP rights in that product are exhausted and cannot block further resale within the EEA

Answer

EU regional exhaustion means that after a first authorized sale anywhere in the European Economic Area, the IP holder cannot use IP rights to prevent resale within the EEA.

Question 5

Why are arbitration clauses particularly important in international license agreements?

Accepted Answer

They provide a neutral, enforceable dispute resolution mechanism across borders without relying on any single country's court system

Answer

International arbitration awards are enforceable in over 170 countries under the New York Convention, making them far more practical than foreign court judgments for cross-border disputes.

(CLP) Certified Licensing Professional Practice Test

(CLP) Certified Licensing Professional Practice Test

CLP CLP International Licensing 2