April 12, 2024
Transfer of intellectual property rights
1. Methods to transfer rights:
1.1. License Agreement
1.2. Copyright Agreement
1.3. Agreement on the transfer of the right to a patent
1.4. Alienation of an intellectual property object
1.5. Agreement on the transfer of trademark rights
2. Features of the transfer of rights
3. Consequences (including tax consequences)
Legislative Acts:
- Civil Code of the Republic of Uzbekistan,
- Tax Code of the Republic of Uzbekistan,
- Law of the Republic of Uzbekistan on Copyright and Related Rights,
- Law of the Republic of Uzbekistan on Trademarks, Service Marks, and Appellations of Origin of Goods,
- Law of the Republic of Uzbekistan on Firm Names,
- Law of the Republic of Uzbekistan Inventions, Utility Models, and Industrial Designs,
- Law of the Republic of Uzbekistan on Breeding Achievements,
- Resolution of the Supreme Court Plenum on Some Issues of Consideration of Cases Related to Intellectual Property (No. 19).
1. Methods of transfer of rights
In accordance with Article 1035 of the Civil Code of the Republic of Uzbekistan, the right holder may transfer exclusive rights to an intellectual property object in full or in part to another person by contract, by inheritance, and in the order of legal succession in case of reorganization of the legal entity – the right holder.
The exclusive right to the result of intellectual activity or means of individualization exists independently of the ownership right to the material object.
Further, we will consider in detail each of the ways of transfer of rights to intellectual property objects.
1.1 License Agreement
A license agreement is an agreement under which the licensor (the party holding the exclusive right to the result of intellectual activity or to a means of individualization) grants the licensee permission to use the corresponding intellectual property object. The contract itself is compensatory. There are different types of simple non-exclusive and exclusive licenses.
A simple non-exclusive license implies the rights to use the intellectual property object with the licensor retaining the right to use it and the right to grant a license to other persons, while an exclusive license gives the rights to use the intellectual property object with the licensor retaining the right to use it, but without the right to grant a license to other persons.
1.2 Copyright Agreement
It is noteworthy that the author has the right to distribute the original or copies of the work by selling or transferring ownership through the right to distribute. (Part 3 of Article 1056).
The author has the right to transfer property rights on the basis of an author’s agreement on the transfer of exclusive or non-exclusive rights, according to Article 1067 of the Civil Code of the Republic of Uzbekistan. The copyright agreement on the transfer of non-exclusive rights allows the user to use the work on an equal basis with the owner of the exclusive rights who transferred such rights and (or) other persons who received permission to use this work in the same way.
The terms of the copyright agreement provide for the ways of using the work, the amount of remuneration, and (or) the procedure for determining the amount of remuneration for each method of using the work, the procedure, and the timing of its payment. At the will of the parties, the copyright agreement may provide for other conditions.
1.3 Agreement on the transfer of the right to a patent (assignment of a patent)
As is known, the right to an invention, utility model, and industrial design is protected subject to the grant of a patent, and the exclusive right to use an invention, utility model, or industrial design protected by a patent belongs to the copyright holder. At the same time, other persons are not entitled to use an invention, utility model, or industrial design without the permission of the patent holder.
The right to obtain and own a patent, as well as the rights arising from the registration of a patent application, may be fully or partially transferred under an agreement on the transfer of patent rights to another person.
The agreement on the transfer of the right to a patent (on the assignment of a patent) must be concluded in writing and must be registered with an authorized state body.
1.4 Alienation of Intellectual Property
One of the ways to transfer the right to an intellectual property object is its alienation. For example, the alienation and transfer of the right to the corporate name of a legal entity is allowed during the reorganization of a legal entity and the alienation of the enterprise as a whole. (Article 1101 of the Civil Code of the Republic of Uzbekistan).
1.5 Agreement on the transfer of trademark rights
The transfer of the right to a trademark in whole or in part may also be carried out by the right holder to another person under an agreement on the transfer of the right to a trademark or under a license agreement. It is also possible to transfer this right by way of succession during the reorganization of the legal entity of the trademark owner. The agreement on the transfer of the right to a trademark requires a written form of conclusion, as well as registration with an authorized state body, in accordance with Article 1106 of the Civil Code of the Republic of Uzbekistan.
The transfer of the right to a trademark is not allowed if it may mislead the consumer about the product or its manufacturer. (Article 30 of the Law “On Trademarks, service marks and Appellations of origin of goods”).
2. Inheritance transition
The transfer of rights to a selection achievement can be carried out both under a license agreement and an assignment agreement, and through inheritance.
It is noteworthy that the patent for an object of industrial property, as well as the right to receive it, are inherited. (Part 11 of Article 5 of the Law “On Inventions, Utility Models and Industrial Designs”).
Features of the transfer of intellectual property rights.
As mentioned above, the creation of intellectual property objects entails the emergence of personal non-property and property rights.
Only property rights to intellectual property objects are involved in civil turnover. Non-property rights are inalienable and non-transferable since they do not have economic content, unlike property rights. According to Article 1054 of the Civil Code of the Republic of Uzbekistan, personal non-property rights belong to the author regardless of his property rights and are reserved for him in case of transfer of exclusive rights to use the work, since non-property rights are inalienable and non-transferable and they do not have economic content, unlike property rights. An agreement with someone and the author’s statement on the refusal to exercise personal non-property rights are null and void.
In this regard, the biggest feature of the transfer of intellectual property rights, perhaps, is the impossibility of transferring personal non-property rights due to the lack of economic content and the nature of inalienable rights in them.
There is a principle of freedom of contract in the legal system, which means that citizens and organizations are free to conclude contracts, choose partners under the contract, and determine its terms. But in some cases, the law allows coercion to conclude a contract. That is, if the patent holder does not use a selection achievement in the Republic of Uzbekistan within three years from the date of grant of the patent and refuses to conclude a license agreement and if the non-use of this selection achievement affects public interests, a person wishing to use this selection achievement may apply to the court for a compulsory license. (Article 40 of the Law “On breeding achievements”).
Another feature is the established norm that alienation, other transactions on the assignment of the right to use the name of the place of origin of goods, and the provision of use on the basis of a license are not allowed. (Article 1066 of the Civil Code of the Republic of Uzbekistan).
It is worth noting that the transfer of work into the public domain can also be considered a peculiar feature of the transfer of rights to IP objects. This happens when the copyright on the work expires (after 70 years after the death of the author) and the work can be freely used by any person without payment of royalties.
Regarding brand names, the transfer of rights to them is possible only in the case of reorganization of a legal entity through merger, accession, separation, or separation, as well as sale. (Part 1 of Article 9 of the Law “On Trade Names”).
3. Consequences
By paragraph 20 of the PPVS “On certain issues of consideration of cases related to intellectual property”, based on the provisions of Article 1034 of the Civil Code, when transferring property rights in full to other persons, the rightsholder alienates these rights and third parties have property rights to the object, and in case of a partial transfer, only a certain part of this remains rights.
Further, according to paragraph 22, when transferring exclusive rights to intellectual property objects by inheritance, these rights cannot be divided among several heirs in the form of percentages or parts. In this case, they enjoy exclusive rights jointly.
As for copyright, the transfer of ownership of a tangible object to another person does not mean the transfer of copyright to that person.
Now let’s briefly mention what are the tax consequences of the transfer of rights. The Tax Code does not provide specific rules for the consequences of the transfer of intellectual property rights. However, a special payment is indicated to be paid in case of the use of intangible assets. Intangible assets are the results of intellectual activity and other IP objects. Payments for the use or right to use any intangible asset are royalties. This means that when using an intellectual property object, a special payment is paid – royalties. Some exceptions are not considered royalties. One of them is the transfer of the right to distribute copies of software products without the right to reproduce them or in case of restriction of the use of PP by the end user. (Article 44 of the Tax Code of the Republic of Uzbekistan).
