Patent Licence Agreement Chile (Contrato de Licencia de Patente)

A Patent Licence Agreement Chile (Contrato de Licencia de Patente) is a legally binding contract governed by Articles 50 through 68 of Ley 19.039 of 25 January 1991 (Ley de Propiedad Industrial, substantially amended by Ley 21.355 of 2021) through which the holder of a Chilean patent (patentado or licenciante) grants another party (licenciatario) the right to exploit the patented invention — including manufacturing, using, selling, offering for sale, and importing the patented product or process — within Chile, for a defined period and under agreed commercial conditions, in exchange for royalty payments or other consideration. The Instituto Nacional de Propiedad Industrial (INAPI), established by Ley 20.254 of 2008 under the Ministerio de Economía, Fomento y Turismo, administers the Registro de Patentes de Invención in which both patent grants and associated licence agreements may be recorded.

Chilean patents are granted for a non-renewable term of 20 years from the filing date of the patent application under Article 42 of Ley 19.039 — a term aligned with the TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights) to which Chile is bound as a WTO member. Patent protection under Ley 19.039 covers inventions in any field of technology that are new (nuevas), involve an inventive step (actividad inventiva), and are capable of industrial application (aplicación industrial) — with specific exclusions for discoveries of natural substances, scientific theories, mathematical methods, and plant varieties protected under the Ley 19.342 on Plant Breeders' Rights. The INAPI examines patent applications through a substantive examination process governed by Articles 42–49 of Ley 19.039 and the Decreto Supremo No. 236/2005.

Article 50 of Ley 19.039 establishes the patentee's exclusive rights — the right to prevent third parties from manufacturing, using, offering for sale, selling, or importing the patented product or process without authorisation. A patent licence agreement contractually authorises the licensee to exercise some or all of these rights within the agreed scope. Article 53 provides for voluntary patent licences (licencias voluntarias) between private parties, while Articles 51 and 52 establish the compulsory licence (licencia obligatoria) framework — a critical feature of Chilean patent law allowing INAPI to grant a licence to a third party without the patent owner's consent when the patentee fails to work (explotar) the patent in Chile within four years of grant, or when the public interest requires access to the patented technology. Compulsory licence provisions reflect Chile's implementation of the Doha Declaration on the TRIPS Agreement and Public Health (2001), particularly in the pharmaceutical sector regulated by the Instituto de Salud Pública (ISP) and the Ministerio de Salud.

The cross-border dimension of patent licensing in Chile involves important tax obligations administered by the Servicio de Impuestos Internos (SII). Royalty payments made by a Chilean licenciatario to a foreign patentee are subject to Impuesto Adicional (withholding tax) under Article 59 No. 1 of the Ley sobre Impuesto a la Renta (Decreto Ley 824), generally at 30%, reduced under applicable bilateral tax treaties (Convenios para Evitar la Doble Tributación) — Chile has treaties with over 30 countries. Transfer pricing rules under Article 41-E of the Ley sobre Impuesto a la Renta apply to related-party patent licences, requiring arm's-length royalty rates supported by a Transfer Pricing Study accepted by the SII.

The Tribunal de Defensa de la Libre Competencia (TDLC) and the Fiscalía Nacional Económica (FNE) apply Decreto Ley 211 (Ley de Defensa de la Libre Competencia) to patent licensing arrangements. The TDLC has examined patent licence terms including package licensing, grant-back clauses, territorial restrictions, and royalty stacking in the technology and pharmaceutical sectors, applying the rule of reason to distinguish pro-competitive efficiency-enhancing licences from anti-competitive restraints.

A Patent Licence Agreement Chile is needed whenever the holder of a Chilean patent registered at INAPI wishes to authorise a third party to commercialise the patented technology without permanently transferring patent ownership. The commercial circumstances requiring patent licences span technology transfer, pharmaceutical production, manufacturing, and research and development.

Technology commercialisation by universities and research centres represents a major driver of patent licence agreements in Chile. Universities — including the Universidad de Chile, Pontificia Universidad Católica de Chile, Universidad Técnica Federico Santa María, and Universidad de Concepción — hold significant patent portfolios registered at INAPI, particularly in mining technology, biotechnology, agri-food processing, and clean energy. Their technology transfer offices (Oficinas de Transferencia Tecnológica — OTT) execute patent licence agreements with Chilean companies and multinational corporations to commercialise university-developed inventions. The Chilean government's innovation agency Corfo (Corporación de Fomento de la Producción) funds technology transfer programmes that facilitate university-industry patent licences under its Programas de Innovación.

Pharmaceutical manufacturing and generic drug production require compulsory licence consideration under Articles 51–52 of Ley 19.039 and voluntary licence agreements for patented drug formulations. The Instituto de Salud Pública (ISP) regulates pharmaceutical marketing authorisation in Chile, and companies seeking to produce generic versions of patented medicines before patent expiry must either obtain a voluntary licence or apply for a compulsory licence through INAPI's administrative process. The Ministerio de Salud's regulatory framework under the Código Sanitario (DFL No. 725 of 1968) interacts directly with patent licensing in the health sector.

Manufacturing licensing for industrial processes, chemical formulations, mechanical devices, and electronic systems protected by INAPI-registered patents requires formal licence agreements when Chilean manufacturers wish to use patented production technology. The Corporación de Fomento de la Producción (Corfo) supports Chilean SMEs (Pequeñas y Medianas Empresas — PYMES) in accessing licensed technology through co-financing programmes. Sectoral regulators — including the Superintendencia de Electricidad y Combustibles (SEC) for electrical technology, the Servicio Nacional de Geología y Minería (SERNAGEOMIN) for mining technology, and the Comisión Nacional de Energía (CNE) for energy innovations — may impose specific technical requirements on licensed technologies.

Joint venture and R&D collaboration agreements between companies holding complementary patent portfolios require cross-licence arrangements (licencias cruzadas) governing each party's rights to use the other party's technology. Cross-licences are common in Chile's mining technology sector, where CODELCO (Corporación Nacional del Cobre de Chile), the world's largest copper producer, collaborates with technology suppliers under patent cross-licence frameworks.

Franchise agreements incorporating patented process technologies — restaurant cooking methods, cleaning formulations, manufacturing processes — require patent licences alongside trademark licences to fully document the franchisee's authorised use of the franchisor's intellectual property.

A valid Patent Licence Agreement Chile under Ley 19.039 Articles 50–68 must contain specific elements to be enforceable and registrable with INAPI for third-party protection.

Party Identification and Patent Details: Complete legal identification of the licenciante (patentee) and licenciatario, including full name or razón social, RUT (Rol Único Tributario), registered domicile, and legal representative with valid mandato under Código Civil Articles 2116–2173. The patent must be identified by its INAPI registration number (número de patente), filing date, grant date, expiry date (20 years from filing under Article 42 of Ley 19.039), inventor names, and the complete title and abstract of the invention as registered. A copy of the INAPI Certificado de Concesión de Patente should be appended as an exhibit.

Scope of Licence — Rights Granted: Precise enumeration of the patent rights granted under Article 50 of Ley 19.039 — manufacturing (fabricación), use (uso), offering for sale (oferta para la venta), sale (venta), and import (importación) of the patented product or process — specifying which rights are included and any exclusions. Field-of-use restrictions (restricciones de campo de uso) limiting the licence to specific applications or industries of the patented technology must be clearly stated and are generally enforceable in Chile, subject to TDLC review under Decreto Ley 211.

Exclusivity: Statement of whether the licence is exclusive (exclusiva), sole (única — the licenciante may not grant additional licences but retains its own right to exploit), or non-exclusive (no exclusiva). Article 50 of Ley 19.039 grants the patentee exclusive rights — an exclusive patent licence transfers the exercise of these exclusivity rights to the licenciatario for the agreed scope. INAPI registration under Article 53 provides third-party enforceability for both exclusive and non-exclusive licences.

Territorial and Temporal Scope: The territory (the Republic of Chile, or specific regions) and the term of the licence (not to exceed the remaining patent term — patent expires 20 years from filing date under Article 42). Sub-agreements for international territories require foreign law compliance.

Royalty Structure: Specification of the royalty base, rate (percentage of net sales, per-unit royalty, lump sum, or milestone payments), payment currency (CLP or UF), payment schedule, audit rights allowing the licenciante to verify the licenciatario's royalty calculations through inspection of accounting records, and interest on late payments. SII withholding tax obligations under Article 59 of Decreto Ley 824 must be addressed for cross-border royalty payments.

Working Obligation: Under Articles 51–52 of Ley 19.039, a patent not worked in Chile within four years of grant may be subject to a compulsory licence application. The licence agreement should impose a working obligation on the licenciatario — minimum production volumes, market launch dates, or commercialisation milestones — ensuring that the patent is actively exploited and protecting both parties from compulsory licence exposure.

Sublicensing: Article 53 of Ley 19.039 requires express written authorisation from the licenciante for the licenciatario to grant sublicences. The agreement should specify whether sublicensing is permitted and under what conditions, including the licenciante's approval rights, INAPI registration of sublicences, and flow-down obligations ensuring sublicensees comply with the principal licence terms.

Improvements and Grant-Back Provisions: Specification of ownership of improvements (mejoras) to the patented invention developed by the licenciatario during the licence term, and any grant-back obligations requiring the licenciatario to licence improvements back to the licenciante. The TDLC reviews exclusive grant-back clauses under Decreto Ley 211 as potential competition law risks — non-exclusive grant-backs are generally pro-competitive.

Warranties and Indemnification: The licenciante warrants that the patent is valid, in force, and that the licenciante has authority to grant the licence. Indemnification provisions addressing third-party patent infringement claims against the licenciatario — and the parties' respective obligations to defend or settle such claims — must be specified. Patent validity challenges (acciones de nulidad de patente) under Article 67 of Ley 19.039 by the licenciatario or third parties should be addressed.

Termination and Lapse: Grounds for termination including non-payment, non-working, invalidity of the patent, insolvency under Ley 20.720, and mutual agreement. Consequences of patent expiry — the technology entering the public domain — including the licenciatario's right to continue using the technology royalty-free after the patent lapses.

Forms-legal.com provides this Patent Licence Agreement Chile template as a reference framework for technology licensing under Ley 19.039. Patent prosecution history at INAPI, compulsory licence risk assessment, SII tax implications, TDLC competition law review, and technical due diligence on patent validity all require analysis by a licensed Abogado with intellectual property expertise and, where relevant, a registered Agente de Propiedad Industrial admitted before INAPI.