Articles on Law, Science, and Engineering

PART II: Contract Liability (cont'd)

Assignments and Licenses as Contracts and Warranties

Since certain intellectual property rights initially belong to the engineer (e.g., patent rights belong initially to the inventor), it is important to realize that licensing and assignments of rights to technology can provide the basis for a contractual relationship and implied warranties. The Lanham Act makes the owners of one type of intellectual property, trademarks, responsible for the nature and quality of products on which their marks appear. The trend in international regulation of technology transfer is clearly toward licensor warranties of technology. The United Nations Council for the Transfer of Technology requires licensor to guarantee that their technology meets the description in the agreement and is suitable for its intended use. The World Intellectual Property Organization's Model Law for licensing regulation prohibits any term which would restrict the transferor's liability resulting from defects inherent in the technology to be transferred. The Andean Common Market Code requires licensor to assure the quality of products. If violated, these warranties provide the basis for breach of contract liability by engineers and other providers of technology. It is likely that further development of this legal theory will continue along these lines in disputes involving multi-national corporations and catastrophic industrial accidents, such as that which occurred in Bhopal, India.

Next - Sales and Deceptive Trade Practices
Previous - About Contracts and Warranties