 Many examples of licenses and
  agreements available
 Actual form of clauses not important,
  content is
 Clause by cl...
 Business Terms - Use of a
  term sheet or Memorandum
  of Understanding
 Reviewing the first draft
 Associated Documen...
 Not legally binding
 Statement of
  background and
  intentions
 Good place to identify
  problems such as
  conflicts...
   What should be defined; avoided
   Capitalize defined terms
   External references to other material
   Consistency...
 Exclusive versus non-exclusive
 Transferable versus non-transferable
 Field of use / Territory
 Right to sublicense
...
 Reservation of certain rights by the
  Licensor
 Non-commercial purposes
   Right to Sublicense
   Control over Sublicensing
   Approvals: consent versus notice, timelines
   Flow through pro...
   Fully paid up Licenses
   Royalties based upon gross,
    net or product sales
   Royalty “reach through” on sublice...
 Management may pass from licensor to
  licensee over time
 Issues of control, report, consent and
  abandonment
 Who p...
 Use and scope of an indemnity
 Limitation on amount of claim
 Who wants them
 Who should give them
 What does a Licensor warrant?
    › Different types of licensors
    › What can ...
 Permitted circumstances of disclosure
 What constitutes “confidential
  information”
 Importance of confidentiality fo...
 Report of activities with respect to
  exploitation of the technology
 Frequency
 Right to audit
 Accounting
  standa...
 Term of the license
 Events of termination
    › Automatic (insolvency)
    › Curable breaches
 Termination process
 ...
 Public liability or product liability
  insurance
 Absolute need for both in most
  circumstances
 Indemnity vs. Insur...
 Proper law of the contract
 Attornment clause
Marcel D. Mongeon
             +1 (905) 390 1818
marcel@mongeonconsulting.com
Licensing Agreement Terms
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Licensing Agreement Terms

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A summary of terms that should be included in licence agreements. Presented at an ASEAN-USPTO Program on Technology Transfer in Bangkok, Thailand, July 2, 2009.

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Licensing Agreement Terms

  1. 1.  Many examples of licenses and agreements available  Actual form of clauses not important, content is  Clause by clause review doesn’t deal with language but the concepts
  2. 2.  Business Terms - Use of a term sheet or Memorandum of Understanding  Reviewing the first draft  Associated Documents
  3. 3.  Not legally binding  Statement of background and intentions  Good place to identify problems such as conflicts of interest
  4. 4.  What should be defined; avoided  Capitalize defined terms  External references to other material  Consistency among agreements  Reference appendices for variable information  Watch for ‘cut and paste’ definitions
  5. 5.  Exclusive versus non-exclusive  Transferable versus non-transferable  Field of use / Territory  Right to sublicense  Use of Technology  Grant of License to an affiliated company  Cross-licensing  Improvements
  6. 6.  Reservation of certain rights by the Licensor  Non-commercial purposes
  7. 7.  Right to Sublicense  Control over Sublicensing  Approvals: consent versus notice, timelines  Flow through provisions: indemnity, royalties  What happens in the event of default of the head licence (comfort letters)  End licenses (often attached as an appendix)  Obligation to submit copies of licences
  8. 8.  Fully paid up Licenses  Royalties based upon gross, net or product sales  Royalty “reach through” on sublicences  Minimum royalties (creditable?)  Milestone payments  Interest on over-due amounts  Stacking provisions  Abeyance of payment pending results of infringement action
  9. 9.  Management may pass from licensor to licensee over time  Issues of control, report, consent and abandonment  Who pays?  Who is the assignee?  Obligation to mark or label licensed products
  10. 10.  Use and scope of an indemnity  Limitation on amount of claim
  11. 11.  Who wants them  Who should give them  What does a Licensor warrant? › Different types of licensors › What can you actually control?  Ownership; non-infringement  Disclaim technology “fitness for purpose”
  12. 12.  Permitted circumstances of disclosure  What constitutes “confidential information”  Importance of confidentiality for trade secrets or know-how
  13. 13.  Report of activities with respect to exploitation of the technology  Frequency  Right to audit  Accounting standards
  14. 14.  Term of the license  Events of termination › Automatic (insolvency) › Curable breaches  Termination process  Consequences to sub-licensees of terminating the head licence
  15. 15.  Public liability or product liability insurance  Absolute need for both in most circumstances  Indemnity vs. Insurance
  16. 16.  Proper law of the contract  Attornment clause
  17. 17. Marcel D. Mongeon +1 (905) 390 1818 marcel@mongeonconsulting.com
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