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Copyright: Continuation of sublicense upon termination of main license

10-10-2012 11:40 AM CET | Politics, Law & Society

Press release from: bunk-alliance Rechtsanwaltsgesellschaft mbH

Copyright: Continuation of sublicense upon termination of main

If the owner of a main license sublicensed the relevant copyright exploitation right, which was granted to him in a license agreement entered into with the licensor, the sublicense can continue even if the main license got terminated. However the main licensor then has a claim against the main licensee for cessation of the right to royalty payments from the sublicensee.

The decision of the German Supreme Court (Bundesgerichtshof) of 19.07.2012 (Case No. I ZR 70/10) was based on the following facts:
A company that develops and sells software (main licensor) had an oral license agreement with another company (main licensee) with regard to copyright exploitation rights on software developed by it. Those copyright exploitation rights were sub licensed by the main licensee within its group to another company of the group (sublicensee). After the main licensee had not paid royalty fees for several months, the main licensor terminated the license agreement.

Insolvency proceedings were opened over the assets of the main licensee. The main licensor was of the opinion that any sub licenses granted by the main licensee would be cancelled and that the exclusive copyright exploitation rights on the software would revert to the main licensor. The Supreme Court has opposed this view. Although the court outlined that in general copyright exploitation rights revert to the originator after termination of license agreements, without the need of separate reassignment act, this does not lead to the automatic reassignment of sublicenses. However the Supreme Court saw a claim of the main licensor against the main licensee for cessation of claims on royalty fees against the sub licensee. This claim continues to exist even if the main licensee falls into insolvency, if the insolvency administrator with regard to the main license agreement chose non performance, however with regard to the sub license agreements performance.

However this claim only leads to a cessation of royalty payments under the sublicense, respectively in so far as the royalty fee is were already gathered by the main licensee, to a transfer of those royalty fees to the main licensor. However the royalty fees under the sublicense do not have to have the same extent as under the main license agreement, which nevertheless can then lead to a loss for the main licensor. On the other hand theoretically the royalty fees under the sub license can also be higher than under the main license, at least for sublicenses within groups this is not unlikely.

The law firm was established in 2003 by Dr. Artur Bunk, an Attorney-at-Law. Qualified in 1995, he was admitted to the Frankfurt Bar in 1997 after obtaining an LL.D. in European Law at the University Viadrina in Frankfurt (Oder). During his career he has worked with the German law firm Pünder, Volhard, Weber & Axster (now Clifford Chance), was Head of Office at Rödl & Partner in Poland, and Senior Legal Counsel at the Legal and Restructuring Department of KfW. In addition to German, he also speaks fluent English and Polish.

Our offices are based around 45 minutes from Frankfurt/Main International Airport in and approx. the same distance from Frankfurt City.

Thanks to the professional experience and background of our Principal and our Attorneys we are in a position to meet the highest requirements and expectations of international clients, which forms an integral part of our business philosophy, enabled us to establish a profound know-how base on international matters unmatched by law offices of comparable size and background. With our network of external consultants (auditors, tax advisors), we are well equipped to perform advisory services usually only found in much larger law offices. Our comparatively low overheads and flexibility enable us to provide our services on a competitive basis.
bunk-alliance has established a close cooperation with law offices in Italy, India, Poland, Slovakia, with auditors and tax advisory offices in Germany and Poland and various governmental agencies.

Office Worms
Goethestr. 15
67547 Worms

Phone: +49 6241 97249 0
Fax: +49 6241 97249 11

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