Foundations and Scope of the Obligation to Exploit Industrial Intellectual Property by the Contracting Party

Document Type : Research Paper

Authors

1 Professor, Department of Intellectual Property Law, Faculty of Law, Tarbiat Modares University, Tehran, Iran.

2 MA. in Intellectual Property Law, Faculty of Law, Tarbiat Modares University, Tehran, Iran.

10.22059/jlq.2026.393735.1007983

Abstract

 Introduction
The Creators of intellectual property seek to distribute their intellectual achievements to society and exploit them to acquire wealth and recognition. To this end, they proceed to conclude exploitation contracts with capital owners. Legal systems that deem the widespread dissemination and proliferation of the results of such intellectual assets in society as beneficial, indeed necessary, have allocated specific monopolies and protections to these individuals. This is intended to encourage both creators and investors to enter into exploitation contracts. Furthermore, these systems have established legal sanctions to prevent the breach of the obligation to exploit. In essence, industrial intellectual property, including inventions, trademarks, and industrial designs, is recognized as an engine of economic and technological development. The effective exploitation of these assets benefits not only the right holder but also serves the public interest. A foundational question is whether the contracting party—be it the inventor, trademark owner, or industrial designer—is obligated to exploit the intellectual property subject to the contract. The obligation to exploit prevents intellectual assets from lying fallow, ensuring that the monopolies granted for such properties do not become sterile and that both society and the right holder can benefit from their potential. The basis for recognizing an exploitation obligation in a contract may stem from the method of determining and paying royalties, statutory provisions, legal principles, or an explicit contractual clause. However, it is crucial to note that the core focus of this research excludes scenarios in which the parties have explicitly or implicitly agreed to the existence or defined the scope of such an obligation. The central debate, rather, concerns the existence or non-existence of this obligation in cases of contractual silence. The primary research question can thus be formulated as follows: In contracts for the transfer or licensing of industrial intellectual property rights, does the party contracting with the intellectual property owner undertake an obligation to exploit, produce, and commercialize products or services derived from or related to that intellectual property? Through a comparative study of Iranian and French law, this research analyzes the foundations, characteristics, and scope of this obligation and seeks to answer this question.
Methodology
This research employs a descriptive-analytical method, utilizing library and internet resources. Relevant Iranian industrial property laws, particularly the Law on the Protection of Industrial Property enacted in 1403 (2024-2025), as well as French legal sources, have been examined. Furthermore, French case law and the opinions of legal scholars in this field have been analyzed.
Conclusion
The obligation to exploit intellectual property plays a vital role in the intellectual property system. It prevents the stagnation of industrial intellectual assets, guarantees a return on investment for both the owner and licensee through effective utilization, and maintains a balance between the owner's exclusive rights and the public interest by promoting active use. While Iranian law does not explicitly affirm an obligation to exploit in industrial property contracts, one can infer its implicit presence even in the absence of an explicit stipulation in exploitation agreements structured as permissions (i.e., exclusive or non-exclusive licenses and franchises). This inference is drawn from existing legal provisions, the legislator's emphasis, and the inherent nature and rationale underlying the recognition and transfer of these rights. In outright assignment contracts, the legal nexus between the creator and the intellectual achievement is severed; the creator cannot compel the assignee to exploit. However, the assignee, as the legal successor, is bound to observe statutory duties, which include the effective exploitation of the asset.
 
 
 
 
 
 

Keywords

References

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Law Quarterly
Volume 56, Issue 1
May 2026
Pages 145-168

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