When the parties never agreed the territory: what to do first
When a licence agreement never fixes a territory, the licence does not become void. Scope defaults to what the rest of the agreement implies, to the governing law's rules of interpretation, and — for a right that is unitary by nature — to the territory the right itself already covers. The first step is not to renegotiate. It is to work out which of those three defaults applies before either side acts on an assumption the other never agreed to.
The legal basis, where one exists
Not every IP right has an EU-level default answer to a silent territory clause. Where one exists, it comes from the unitary character of the right, not from a licensing article written to cover this exact gap.
For an EU trade mark, the starting point is the right's own scope. Under Regulation (EU) 2017/1001 (EUTMR), an EU trade mark produces the same effect throughout the Union as a single right. A licence silent on territory is read against that single, EU-wide scope, not against any one member state chosen by guesswork. Unitary patents sit on the same logic: under Regulation (EU) No 1257/2012, unitary effect covers the participating member states as one right, not a bundle of national ones stitched together after the fact.
Software copyright and database rights carry no such default. Neither Directive 2009/24/EC nor Directive 96/9/EC sets a territorial scope for a licence that is silent on the point. For a computer program or a database, the gap is genuine, and it is closed by the contract's other terms and by the governing law's ordinary rules of interpretation — not by an EU regulation standing in for the missing clause.
| Right type | EU-level territorial default | Source |
|---|---|---|
| EU trade mark | Unitary — the whole Union, unless expressly limited | Regulation (EU) 2017/1001 (EUTMR) |
| Unitary patent | Unitary — the participating member states, unless expressly limited | Regulation (EU) No 1257/2012 |
| Computer program (copyright) | None — resolved by contract and governing law | Directive 2009/24/EC |
| Database right | None — resolved by contract and governing law | Directive 96/9/EC |
What changes in practice
The practical effect turns entirely on which row of that table your right sits in. A trade mark or unitary patent licence silent on territory tends to be read as covering the full territory the underlying right already covers. A software or database licence carries no such fallback, and silence there is a real gap: each side can act on a different reading until a court, or the parties themselves, close it. Whichever row applies, the gap does not pause use. Distribution, sub-licensing and enforcement all continue on two competing readings until someone resolves which one governs.
What to do first
- The licensee's or licensor's legal team identifies the right's regime first — an EU trade mark, a unitary patent, or a right with no EU-level default — before assuming any answer applies to this case.
- Whoever holds the file pulls the full negotiation record: correspondence, term sheets and drafts. The party disputing scope needs to show what territory was actually discussed, not what it now finds convenient.
- Both commercial teams freeze current expansion in writing, pending resolution — no new distribution, marketing or sub-licensing into countries not already in active use.
- Counsel checks the governing law and jurisdiction clause. A territorial dispute is decided under the law the licence names, not under the law of either party's home state by default.
- The party raising the issue sends formal written notice stating the reading it intends to rely on, and invites a joint clarification within a stated period.
- Neither side escalates to a cease-and-desist letter or an infringement claim before that clarification step. A claim built on the wrong territorial assumption is difficult to withdraw cleanly.
Who decides
Absent an arbitration clause or an exclusive jurisdiction clause in the licence, the question goes to the court named in the governing law and jurisdiction clause. That court decides on the negotiation record, the parties' course of dealing, and the object of the agreement as a whole. For an EU trade mark, the unitary character under the EUTMR is a fact the court applies directly, not a point either side needs to argue from scratch. For software and database rights, the court has no EU default to fall back on, and decides purely on the contract and the applicable national law.
If your situation differs
If the licensed portfolio was later split — the kind of restructuring covered in A portfolio must be split in a demerger trade — the territorial question multiplies across each resulting entity, and each new owner needs its own written confirmation of scope before it relies on the old licence.
If the deliverable under the licence was accepted by the licensee but the underlying right was never formally transferred — see When the deliverable was accepted but never transferred: what — territory becomes secondary. The ownership gap should close first, or any territorial answer will need revisiting once it does.
If the right exists off-chain and on-chain in parallel, the territorial reading of the off-chain licence does not automatically bind whatever the on-chain metadata states — a mismatch worked through in When an off-chain agreement contradicts metadata in practice. The two records need reconciling on their own terms.
What this page does not cover
This page does not fix a territory, draft a notice, or calculate what expansion outside the assumed territory has already cost either side. It sets out the order of steps and the regime that governs before that work begins. Drafting the notice, valuing the exposure and negotiating the fix are separate pieces of work, not extensions of this one.
Verified
This page was checked on 14 January 2025. Primary sources: Regulation (EU) 2017/1001 (EUTMR); Regulation (EU) No 1257/2012; Directive 2009/24/EC; Directive 96/9/EC. Correspondence and drafts gathered during a review of this kind are handled under our own file policy — see Retention: the report, the extracts and our copy explained.
Related situations
A different but related point of failure in the same kind of agreement is covered in When a licence is granted by a non-owner: what — worth ruling out early, since it changes which of the steps above applies first.
If your licence is silent on territory and the counterparty has already started distributing outside the region you assumed was covered, the ordering above matters. Talk to us before either side's use hardens into a position neither can walk back from.
FAQ
What is the first step when the parties never agreed the territory?
Identify which regime the licensed right belongs to — an EU trade mark, a unitary patent, or a right with no EU-level territorial default — before assuming any default answer applies to your case.
Which deadline is already running?
No EU regulation fixes a single limitation period for a territorial dispute of this kind. The relevant clock is set by the governing law named in the licence, and it typically starts from when the disputed use began, not from when either party discovered it.
Who decides, and on what evidence?
The court or tribunal named in the licence's jurisdiction clause decides, on the negotiation record and the parties' course of dealing — and, for a unitary EU right, on the territorial scope the right carries by law.