March 12, 2020
Daniel Bereskin and Paul Blizzard coauthored Canada's Chapter on "Licensing" published in Lexology Getting The Deal Through.
Are there any restrictions on the establishment of a business entity by a foreign licensor or a joint venture involving a foreign licensor and are there any restrictions against a foreign licensor entering into a licence agreement without establishing a subsidiary or branch office? Whether or not any such restrictions exist, is there any filing or regulatory review process required before a foreign licensor can establish a business entity or joint venture in your jurisdiction?
In general, any business entity established by a foreign licensor in Canada and any joint venture involving a foreign licensor may carry on business in Canada, with or without a domestic subsidiary or branch office. No filing or regulatory review process is required in advance of engaging in licensing activities in Canada. Licence agreements are made subject to normal rules of contract interpretation. If the agreement includes a choice of law clause, Canadian courts will generally give effect to it, unless the choice lacks bona fides or is contrary to public policy, etc.
A foreign licensor that plans to set up an entity or enter a joint venture in Canada must notify Industry Canada as required by the Investment Canada Act, RSC, 1985, c 28. Foreign investors should be aware of World Trade Organization rules requiring reviews related to acquisitions.
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This article was first published in Lexology Getting The Deal Through in March 2020.