What fate awaits the sub-license if the primary license agreement and therewith the primary license are terminated? This question of continuance of sub-licenses now answered by the BGH arises in particular if the primary license agreement has been terminated or if the insolvency administrator has challenged the current primary license agreement in the event of insolvency.

With its decision “Reifen Progressiv” (judgement of 3/2672009 – I ZR 153/06) the BGH already indicated some time ago that a sub-license is not necessarily dependent on the existence of a corresponding primary license. Back then, the Court ruled that a non-exclusive derived right of use in consideration for a non-continuous fee does not lapse if the right of use of the earlier level (i.e. primary license) lapses on the basis of an effective revocation by the author due to non-use (cf. § 41 of the German Copyright Act [UrhG]). The BGH, now, transfers that principle in its current decision (judgment of 19/7/2012 – I ZR 70/10 –  M2Trade) to those situations, in which the primary licensee sublicenses a non-exclusive right to use to a sub-licensee in consideration for continuous fee payments and the primary license lapses not on the basis of a revocation due to non-use, but of other reasons. Although in the case of termination of the primary license agreement the primary license is reverted automatically to the licensor, the sub-license still remains with the sub-licensee. That conclusion is not changed – as in the present case decided by the BGH –  by the fact that a so-called corporate license was granted to the primary licensee. Granting such a primary license does not necessarily mean that corporate subsidiary companies will solely be granted sub-licenses which will be subject to a reversion in the event that the primary license is terminated. The BGH justifies the continuance of the sub-license especially along the principle of protection of succession (cf. § 33 sentence 2 UrhG) according to which licenses continue to exist if the licensor is changed or if he waives his right.

Furthermore, the interest of the sub-licensee on the continuance of the sub-license had also to be given a greater account than the interest of the primary licensor on its discontinuance. On the one hand the termination of the sub-license could even lead to the destruction of the economic existence of the sub-licensee. On the other hand, since the sub-license still remains the primary licensee is entitled to call for remuneration from the sub-licensee if a continuous license fee has been agreed upon. However, the primary licensor is, actually, entitled to such remuneration. Accordingly, the BGH refers the primary licensor to a claim based on the unjust enrichment pursuant to § 812 para. 1 sentence 1 alt. 2 of the German Civil Code (BGB). Since the primary licensee acquires further claims for license remuneration at the expense of the primary licensor, namely, under the violation of his rights of exploitation of the work the primary licensor shall be entitled to the assignment of the claims for license remuneration against the sub-licensee to him. However, this applies only if continuous license fee payment obligations exist at all. If the sub-licensee has obtained a license that has been settled by a single payment already, there are no additional remuneration claims, which could be assigned to the primary licensor.

Fortunately, the BGH has not limited its decision to only copyright license situations, but rather noted that the issue of license continuance can also be taken into account for intellectual property rights in general. In this matter on request of the deciding I. Civil Senate of the Court  the X. Civil Senate competent for patent matters did not claim any objections to such an interpretation of the protection of succession, so the issue of continuance of sub-licenses in the event of termination of the primary license seems to be resolved for intellectual property rights in general.