A Study on the Seller's Liability under Article 42(1) of the CISG

CISG 제42조 (1)항의 매도인의 책임에 관한 소고

The way for seller to procure the goods for selling is to produce the goods at his own factory and to buy the manufactured goods from the other company. In order to produce the goods for selling the seller have to obtain the resource from the domestic company or overseas. In the middle of producing the goods to sell, seller may breach the right of a third party based on intellectual property rights. That is to say, seller may use the machine that has not itself been patented and use a process which has been patented by a third party. Seller may manufacture the goods which themselves are subject to the third party industrial property rights. Nowadays it is stressed the importance of intellectual property rights such as a patent, brand, and design. These factors consist of the core elements of the competitiveness of the goods. Many embedded software have been used in the various sector. So the disputes regarding to the intellectual property rights is gradually increasing in number. Article 42 of CISG defines the seller's delivery obligations and liabilities in respect to third party intellectual property rights and claims. It contains a special rule for this similar kind of defective in title, which tries to provide an proper solution to the complex problems caused by such rights and claims in international transactions. When seller will apply this clause to the business fields, there are several points to which seller should give attention. First, Intellectual property is general terms in intangible property rights, encompassing both copyright and industrial property. Which matter fall within the scope of intellectual property? The scope of intellectual property can be inferred from the relevant international conventions, which are based on broad international consensus. Second, Article 42 of CISG governs the relationship between the seller and the buyer, that is to say, questions of who has to bear the risk of third party intellectual property rights. The existence of such intellectual property rights, the remedies available and the question of acquiring goods free of an encumbrances in good faith are outside the scope of the CISG. The governing law regarding to the abovementioned matters is needed.