Can We Develop ‘IncoIPterms’ for Intellectual Property? 

A Legal Feasibility Study of Standardized Terms in International IP Contracts

By Mohsen Hasheminasab

Why Look to Incoterms?

The Incoterms, developed by the International Chamber of Commerce (ICC), are a globally recognized set of rules for the international sale of goods. These terms have become an essential part of international trade law. They clearly define the obligations, risks, and costs borne by buyers and sellers, helping to minimize disputes and standardize practices across jurisdictions.

This success prompts the question: Can we replicate this model for intellectual property? Enter the concept of IncoIPterms: uniform international commercial terms specifically designed for IP transactions.

The TRIPS Gap and the Need for IncoIPterms

While the TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) aimed to harmonize IP law globally, its requirement for minimum standards has often led to the maximization of IP rights instead. The result? A growing imbalance between IP protection and the need for legal consistency in cross-border commerce.

IncoIPterms could fill this gap by offering flexible, standardized contract language for IP transactions,  in the same manner as Incoterms operate in the trade of goods.

Key Challenges

Of course, developing international IP terms is not a straightforward proposition. Some of the main obstacles include:

• The territorial principle in IP: Unlike Incoterms, which govern private commercial agreements, IP rights are enforced through national legal systems. The territorial nature of IP rights complicates any attempt at standardization.
• The intangibility of IP: Incoterms apply to physical goods, whereas IP involves intangible assets—requiring entirely different legal considerations.
• The diversity of IP subjects: The subject matter of IP deals varies widely. This diversity makes universal standardization a real challenge.
• A lack of global consensus: The establishment of standardized IP contractual terms is essential, but such terms must be widely accepted by all relevant jurisdictions to have practical utility. Without international consensus, such terms would lack the legal legitimacy required to resolve disputes or provide certainty in commercial transactions.

Viable Solutions

While there are hurdles to be met in the development of IncoIPterms, none is insurmountable and solutions do exist:

• Clarify the scope: IncoIPterms wouldn’t regulate the granting of IP rights (which is the domain of states) but rather the commercial use of those rights after they’re granted. Like Incoterms, they could function without interfering with state sovereignty. In fact, one of the main reasons for the creation of Incoterms was the territorial principle and variations in national law, so this challenge is not new.
• Embrace IP’s intangibility: Though intangible, IP assets still benefit from contractual clarity. Indeed, given the complexities and flexibilities inherent in establishing the subject and scope of IP rights, standardized terms are all the more necessary to reduce confusion and foster greater legal certainty in IP transactions.
• Focus on core agreement types: While the subject matter of IP contracts may differ, they generally fall into a few main categories: assignment, permission for use or sale, sale of IP-based goods, joint ventures, and confidentiality agreements. By establishing standardized terms for these core categories, a framework can be built that accommodates diversity while remaining aligned with the territorial nature of IP, except in the case of assignment. As with Incoterms, exclusions and updates can be applied regularly.
• Leverage existing practices: Customary international IP practices already exist. By building on these foundations, IncoIPterms could gain traction and acceptance across legal systems.

A Path Forward

Despite the complex nature of IP law, the potential benefits of creating standardized international contractual terms are clear. The criteria, standards, and categories under IncoIPterms must differ from those of Incoterms, of course, to suit the unique nature of IP. But just as Incoterms have helped streamline trade in tangible goods, so too could IncoIPterms promote smoother, more predictable global commerce in intangible assets.

The vision is not to override national IP systems, it should be stressed, but to offer a contractual toolkit that can be used across jurisdictions, thereby reducing ambiguity, enhancing efficiency, and ultimately supporting innovation and fair trade. Recognizing the distinction between the creation and commercial exploitation of IP rights, along with existing international practices, reveals that such international IP terms are both feasible and beneficial.

Developing IncoIPterms will require thoughtful legal design, international cooperation, and a strong understanding of both trade and IP law. But the reward—a predictable, transparent, and more dispute-resistant framework for global IP transactions—makes this a concept well worth pursuing.