Welcome to Penrose Intellectual Property Law
Penrose specialises in the field of Dutch Intellectual Property (IP) Law. We advise and litigate in matters concerning the protection and enforcement of IP rights, such as copyrights, trademark rights and design rights. Frequently encountered topics in this respect are the infringement and enforcement of Dutch law IP rights and trade secrets, difficulties in relation to license agreements and the question how to optimally structure the company’s IP rights. Some of the IP related issues that we encounter on a daily basis are outlined below.
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IP rights and trade secrets
Intellectual property rights (‘IP rights’) protect immaterial objects such as works, technical inventions, names and logos. The IP rights that almost every entrepreneur comes across are copyrights, trademark rights and trade name rights. In addition, there are also ‘trade secrets’ (or knowhow). Trade secrets do not have the same status as IP rights, however they can be protected to a certain extent. In the Netherlands, the protection on confidential knowhow and trade secrets has been implemented in the Trade Secrets Act (in Dutch: Wet bescherming bedrijfsgeheimen, ‘Wbb’).You can read more about the Wbb and the protection of trade secrets in our blog ‘Protection of trade secrets in the Netherlands’.
By means of an IP right, the owner obtains an absolute and exclusive right to use and exploit the protected work, invention, name or logo. This means that the IP owner can use the work and grant license rights to the use with respect to the work, invention or brand name to others, under certain contractual conditions. This usually involves a license agreement.
Protection and infringement of IP rights in the Netherlands
In order to obtain an IP right in the Netherlands, registration may in some cases be a legal requirement, such as for trademarks, designs and patents. In other cases the right automatically exists upon creation of the work.
To explore the possibilities for a potential collaboration with another party it is often necessary to reveal certain information about your business including IP rights. A non-disclosure agreement (NDA) is a frequently used and helpful means of protecting your IP rights and knowhow. A dispute concerning IP rights often ends with a settlement agreement, or through summary proceedings.
In the event that a third party uses your Dutch intellectual property without your permission you are entitled to object against this. This may be considered an infringement of IP rights. It is also possible that you are held liable for infringing another party’s IP rights. For example, you found a picture on Google and placed it on your own website without asking permission from the photographer.
The owner or successor of intellectual property rights is entitled to grant certain rights in relation to the IP rights to other parties – for example a right to use the IP rights in connection with the production, distribution or commercial exploitation of products or services. This can be arranged and managed by means of a Dutch law license agreement. The license agreement determines the rights and obligations of the licensor (entitled party) and the licensee (the other party that is being granted with the license). Parties may agree that, for example, the licensor is entitled to a royalty payment. In addition, the right to use may be limited, for example to a certain territory, for a specific purpose or in duration.
IP rights in an IP-entity
Since intellectual property rights are essential to the business of many companies, you want to avoid exposing such rights to risks as much as possible. This can be done by means of a separate IP entity, often a Dutch limited liability company. When the intellectual property rights are structured within the operational company that runs the overall commercial risks, that company runs a significant risk with respect to the IP rights. If the company finds itself in financial difficulties or even goes bankrupt, under Dutch law all intellectual property rights will end up in the bankrupt estate and the receiver may try to sell these to the highest bidder.
Therefore, in many corporate structures, intellectual property rights have been transferred to a separate private limited company, an ‘IP-BV’ where BV is the acronym in Dutch for a limited liability company. The separation of IP rights also offers advantages in terms of separating business models and issuing (e.g. white label) licenses.
IP rights in Mergers and Acquisitions
If you intend to take over a (retail) brand or software developer intellectual property rights play an important role. After all, you want to be sure that the selling retailer has correctly registered the relevant trademarks, or that the software developer is actually the legal owner of the source code of the software and that the software is not (solely) build on the basis of open source software.