CLP CLP International Licensing 1 — Questions and Answers
Question 1: The Paris Convention for the Protection of Industrial Property primarily provides what benefit to international patent applicants?
- A 12-month priority period allowing a foreign filing to claim the original application date (Correct answer)
- Automatic patent grant in all member countries upon filing one application
- Standardized royalty rates across all member nations
- Exemption from translation requirements in member countries
Correct answer: A 12-month priority period allowing a foreign filing to claim the original application date
The Paris Convention's priority right allows an applicant who files in one member country to file in other member countries within 12 months claiming the original filing date.
Question 2: Under the Patent Cooperation Treaty (PCT), an international application allows an applicant to:
- File a single application designating multiple countries, deferring national phase entry and costs (Correct answer)
- Obtain a single patent valid in all PCT member states automatically
- Bypass national patent offices entirely and receive a global patent from WIPO
- Extend the patent term in each country by the PCT filing time
Correct answer: File a single application designating multiple countries, deferring national phase entry and costs
A PCT application provides a unified filing procedure covering 150+ countries and defers entry into each country's national phase, buying time for commercial decisions.
Question 3: In international licensing, withholding tax on royalty payments refers to:
- A tax deducted by the licensee's country from royalty payments before remitting them to the foreign licensor (Correct answer)
- A tariff on goods manufactured under a license when exported
- A VAT applied to licensing services in the EU
- A penalty for late royalty reporting to a foreign tax authority
Correct answer: A tax deducted by the licensee's country from royalty payments before remitting them to the foreign licensor
Withholding tax is levied by the licensee's country on outbound royalties, reducing the net amount the licensor receives from international deals.
Question 4: A 'repatriation restriction' in an international license agreement refers to limitations on:
- The licensee's ability to transfer royalty payments out of the country to the foreign licensor (Correct answer)
- The licensor's right to audit books maintained in a foreign country
- The licensee's ability to sublicense in countries that restrict foreign IP
- The export of licensed products from the licensee's manufacturing country
Correct answer: The licensee's ability to transfer royalty payments out of the country to the foreign licensor
Some countries restrict or delay conversion and transfer of currency abroad, which can prevent licensees from remitting royalties to foreign licensors.
Question 5: Which international agreement harmonizes trademark registration procedures through a centralized filing system administered by WIPO?
- Madrid System (Correct answer)
- Paris Convention
- TRIPS Agreement
- Nice Agreement
Correct answer: Madrid System
The Madrid System allows trademark owners to file a single international application at WIPO to seek protection in multiple member countries.
Question 6: The TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) is significant to international licensing because it:
- Establishes minimum IP protection standards that all WTO member countries must provide (Correct answer)
- Creates a global patent office that grants patents valid worldwide
- Prohibits compulsory licensing in all WTO member states
- Sets maximum royalty rates that member states may allow licensors to charge
Correct answer: Establishes minimum IP protection standards that all WTO member countries must provide
TRIPS requires WTO members to enact minimum IP protection levels—including patents, copyrights, and trademarks—providing a baseline for licensors in over 160 countries.
CLP CLP International Licensing 1
The Paris Convention for the Protection of Industrial Property primarily provides what benefit to international patent applicants?