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Lawyer Walter Wright IP Licensing Practices For Early Stage Companies Traps For The Unwary

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Lawyer Walter Wright presentation on intellectual property licensing issues for emerging technology companies

Lawyer Walter Wright presentation on intellectual property licensing issues for emerging technology companies

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  • Representations, Warranties and Indemnification As a licensee, you will want assurances that the licensor owns the rights you seek to acquire so that you will not violate another's rights by using the licensed property. Representations and warranties set forth the licensor's promises with respect to these issues. Indemnification grants the licensee a right to seek damages from the licensor if these representations are false and cause the licensee to suffer a loss. As a licensor, you may also demand representations, warranties, and indemnification from the licensee regarding such issues as financial stability. A covenant is a promise to do or refrain from doing a particular thing. In the intellectual property context, covenants take the form of promises by the licensee to use intellectual property in such a way as to maintain its value and protectability. Covenants can be phrased in terms of "best efforts" or "reasonable efforts." The latter allows cost-benefit considerations in determining whether a licensee has fulfilled his or her promise under specific conditions.
  • Representations, Warranties and Indemnification As a licensee, you will want assurances that the licensor owns the rights you seek to acquire so that you will not violate another's rights by using the licensed property. Representations and warranties set forth the licensor's promises with respect to these issues. Indemnification grants the licensee a right to seek damages from the licensor if these representations are false and cause the licensee to suffer a loss. As a licensor, you may also demand representations, warranties, and indemnification from the licensee regarding such issues as financial stability. A covenant is a promise to do or refrain from doing a particular thing. In the intellectual property context, covenants take the form of promises by the licensee to use intellectual property in such a way as to maintain its value and protectability. Covenants can be phrased in terms of "best efforts" or "reasonable efforts." The latter allows cost-benefit considerations in determining whether a licensee has fulfilled his or her promise under specific conditions.
  • Transcript

    • 1. Business Practices and Legal Issues: Good IP Practices for Early Stage Companies Traps for the Unwary in License Agreements: a Laundry List ofGotchas for Early Stage Companies Delivered Before the M assachusetts Internet and Software Council on September 17, 2003 Walt Wright, Managing Director Trinity Law Group LLCwww.trinitylg.com 200 Lowder Brook Drive – Westwood, MA 02090781.329.0088
    • 2. Emerging Companies: The Vital Role of Software Licenses Operations Product Development RevenueWalter Wright, Managing Director, Rich May Law
    • 3. Emerging Companies As a Licensor As a LicenseeWalter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 4. Know your rights, risks, responsibilities and opportunities. Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 5. Keep Your Goals In Focus Acknowledge Your RisksFocus On The OpportunityMake Practical AssessmentsWalter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 6. Software Asset Management SAM is an emerging disciplineManaging the Asset is Managing the Relationships As a User As a Reseller/Bundler As a Developer Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 7. Licensing AgreementsClick Wrap & Shrink Wrap Negotiated Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 8. Licensing Agreements MOUsAlliance Agreements & Joint Ventures Co-Marketing Agreements Joint Development Agreements Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 9. due diligence scope & specifications The payment optionsLaundr warranties & covenants proprietary rights y List service levels and maintenance assignment breach and remedies Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 10. What Bad Can Happen? Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 11. What Good Can Happen? Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 12. Zeal Obscuring Reality Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 13. Due Diligence For legal & business protection ask and answer the right questions: Does the other party to a licensing agreement have the reputation, financial strength and future potential to make the license worthwhile? Does the other party have the rights it is claiming to transfer?Are all rights being transferred that are needed to fulfill the purpose of the deal ? Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 14. Scope & Specifications Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 15. The specification is the precise description of what is covered by the license. It should beinclusive of all necessary elements to achieve thepurpose of the assignment, but should not be too broad. Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 16. The Scope Of LicenseMost critical element of the license agreement.What the licensee may and may not do with theintellectual property.Limitations include exclusivity, geography, industrysector, market, duration of the license, renewal, and rightsto make improvements or modifications. Walter Wright, Managing Director, Rich May Law
    • 17. Proprietary RightsWalter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 18. Software Escrow AgreementsWalter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 19. Payment OptionsWalter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 20. Payment can take many forms: cash, installment payments,promissory notes, equity payable as a single issuance or ininstallments, and/or royalties.Are royalty payments going to be based on unit sales,percent of gross revenue, or percent of profit?Will there be minimum royalties paid? Sliding-scale royaltypayments?Royalty licenses could make a product too expensive to becompetitive. Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 21. Warranties & Covenantsincluding representations, indemnification and disclaimers Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 22. Disclaimer of Warranties Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 23. AcceptanceWalter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 24. Service Levels And MaintenanceWalter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 25. Confidentiality and Trade Secrets Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 26. Limitation of Damages Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 27. Money in the Maintenance Money Found. Money Lost. Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 28. Dispute ResolutionWalter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 29. InternationalPiracyLimited copyright protectionNo patent protectionCurrency & TaxesUnited Nations Convention on Contracts for theInternational Sale of GoodsCultureEnforcement Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 30. Wright’s Postulate:“Opportunity to be generousand the right to be ruthless” Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 31. Document clearly and use a lawyer. @!#%&$ Express your goals and expectations--and create plans and benchmarks. Protect yourself. Your intellectual propertyand proprietary information and operational autonomy need protection. Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 32. The Hybrid:Software/Data/Business Model/License/Transfer/Alliance Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 33. Counsel to CapitalistsA greater Boston law firm serving companies, investors and entrepreneurs throughout theUnited States and the EU. For over 55 years combined, clients have turned to Trinity LawGroup lawyers for sophisticated legal and strategic counsel in a variety of complex transactions,business disputes and other legal matters Its complex and diverse practice embraces emergingand high growth businesses, venture capital, securities, licensing, mergers & acquisitions,contracts, technology, business services, e-commerce, intellectual property, and sustainableenergy.Trinity Law Group’s law and strategic counseling practice intensely focuses on theorganizational, venture financing, operational and transactional requirements of entrepreneurs,emerging technology and information companies as well as representing venture capital fundsand angel groups in investment transactions and executives in transition. Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 34. About Walter WrightWalter Wright, a Founder of Trinity Law Group, was named by Massachusetts SuperLawyers in Boston magazine as one of the top 100 attorneys in Massachusetts. Ofthe Top 100, he is one of only 3 lawyers selected in the Business/Corporate category.He is named in the Corporate Counsel edition of Super Lawyers as one of the “TopAttorneys in Corporate and Securities Law” across the United States. Walt Wrightserves in significant and vital capacities including lead general counsel, specialcounsel and strategic advisor. He recently celebrated his 25th year of practice. Walter Wright, Attorney -Trinity Law Group LLC www.trinitylg.com
    • 35. Walter A. Wright, III Trinity Law Group LLC 781.329.0088 Email wwright@trinitylg.com Fax 781.459.2683 skype wwrightiii www.trinitylg.com.com www.trinitylg.com/waw.html200 Lowder Brook Drive Westwood, MA 02110