With industrial development and the increase of superior patented invention, opportunity of licensing has increased. Licensing reinvigorates utilization of valuable inventions, enabling utilization of the right while patentee is unable to utilize it and giving patentee a reward for effort. Patent right shall be registered after strict screening, but it may be nullified by invalidation trail decision even after the registration. When invalidation decision to the patent that forms the basis of patent license agreement is adjudicated, the patent right is terminated retroactively. Both parties trusted in the patent right which is already in the public domain. Licensee may consider it unfair to perform obligations that arise from the agreement, while patentee loses the patent right and terminate all the legal relations based on the invalid right. There exist various points of view on how invalidation of patent right effects the patent license agreement. The range of retroactive effect of invalidation trial decision is major criterion of divergence of opinions. On one hand, invalidation of patent right is a primitive incapability of performance, so it terminates the agreement. On the other hand, the decision is only a late cause of incapability. To sum up, invalidity of patent and legal relation of license agreement should be decided theoretically by cause of invalidity and by whether the cause of invalidity results in incapability of the agreement performance. What causes invalidity decides whether patent license agreement is incapable of performance. Judgment of legal relation differs from whether the cause arises before establishment of the agreement. If patented invention is incapable, the agreement is primitively incapable. Retroactive effect of invalidation trial decision only applies legal effect of the decision back to the time when the patent right was established, and the fact that the patent right became invalid was generated after the agreement. As it is incapable performance with late cause, if there exists any cause attributable to patentee, patentee shall indemnify for any damage and licensee may terminate agreement. Unless there exists any cause attributable to both parties, burden of risk test is required. Concluding agreement on the authority of government’s screening and decision, patentee generally does not have any cause to incapable performance. Unjust enrichment of fulfilled part of the agreement can’t be established. The fact that patentee has no liability is more important when the agreement implies not only enforcement of the patent right with benefit to patentee, but also know-how transfer and other contractual obligations. Therefore, as far as patentee is not liable for invalidation of patent, patentee doesn’t have any obligation to return benefit from the agreement based on invalid patent; Provided, That if licensee concludes the agreement by mistake on major part, revocation of the agreement is accepted to return the benefit.