The document discusses domestic and international licensing. It covers the breadth of licensing, including trademarks, copyrights, patents, and other rights. It examines key considerations for licensors and licensees, such as exclusive versus non-exclusive licenses, royalty structures, quality controls, and territorial limitations. The document uses examples like early Apple licenses to Microsoft to illustrate important lessons about clearly specifying license scope. It also discusses managing international licensing programs and complying with varying laws on moral rights.

1. DOMESTIC AND INTERNATIONAL LICENSING
Cliff Potter
Northbrook, IL
+1-847-532-9337

2. Domestic and International Licensing
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LICENSING - WHAT WILL WE DISCUSS?
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The business of licensing, its breadth and other important factors for
the lawyer involved in domestic and international commerce.
The effects of licensing on competition.
The role of competition laws in domestic and international licensing.
Legal issues faced when licensing various types of rights such as likeness
and trademark licenses around the world.
Strategies for planning, review and development of clearly outlined
objectives for licensed products and technologies and avoiding common
licensing mistakes.
License agreements and their possible provisions, terms and
considerations from the standpoint of licensee and licensor.
Domestic and international licensing programs.
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LICENSING – SOME RIGHTS AND CLAIMS IN THIS PROGRAM
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4. Domestic and International Licensing
BREADTH OF LICENSING – WHAT IS INVOLVED?
 Character and likeness
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Trademark and copyright
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From Littelfuse to Apple
Look and feel and trade dress
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From Sumitomo to Boeing
Design patents and shapes
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From MacDonald’s® to USPS
Patent and technology
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From the California Raisins® to Charlie Chaplin
From Apple to Taco Cabana
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5. Domestic and International Licensing
MARKETS AND PARTICIPANTS – WHAT IS INVOLVED?
 Types of markets
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Types of licenses
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Associations, developers and manufacturers
Types of licensees
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Licensing controls under antitrust and other laws
Types of licensors
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Exclusive, non-exclusive, certification and collective
Government involvement
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Geographic, product and technology markets
Members, competitors, domestic and international
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6. Domestic and International Licensing
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THE APPLE LICENSING CONSIDERATIONS
 Graphical user interface (“GUI”) used by Apple was
derived from a Xerox GUI. Microsoft was also
Xerox licensee.
 Differences between major Apple executives over
whether Apple should license its GUI to
competitors.
 Decision not to license broadly ultimately may
have led to demise of Apple products and
ascendency of Microsoft.
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THE APPLE – MICROSOFT LICENSE – A POIGNANT EXAMPLE
 Apple license
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Graphical user interface (“GUI”) used by Apple licensed to
Microsoft one week after Windows 1.0 released.
The license provided simply that “Apple hereby grants to
Microsoft a non-exclusive, worldwide, royaltyfree, perpetual, non-transferable license to use these
derivative works in present and future software programs
and to license them to and through third parties for use in
their software programs.”
The “derivative works” under the license were from “the
visual displays generated by Apple's Lisa and Macintosh
graphic user interface programs.”
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THE APPLE – MICROSOFT LICENSE AGREEMENT LITIGATION
 Apple filed a lawsuit in 1988 contending that
Microsoft Windows programs used more than
what was licensed and therefore violated Apple IP.
 Apple’s claimed damages were $5.5 billion.
 The case established limits on what could be
licensed and what was or had to be considered
unprotectable.
 Apple had failed to establish any of its rights were
violated and was sued by Xerox that claimed its
GUI rights were infringed.
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PRACTICAL LESSONS FROM SHORT LICENSE AGREEMENTS
 General versus specific license agreements
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The short of it – Lack of specificity can result in a failure to
understand scope of agreement, especially in international
agreements
The long of it – Lack of specificity can result in ambiguities that
could be said to lack sufficient specificity to have led to any
license at all.
Implied licenses
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Did Apple lose because of the intent of the parties?
Can breadth of license be controlled by practical
considerations?
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10. Domestic and International Licensing
THE DECISION TO LICENSE – PRELIMINARY ANALYSES
 Relative strength of the right
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Relative strength of the owner
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In the industries involved
In the broader market
Compared with the licensee
Compared with other competitors
Cultural differences
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To the business(es) involved
To the owner
Without owning other necessary rights
International market differences
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http://www.intipsa.com/wp-content/uploads/2012/06/INTIPSA_Tips_-_To_Sell_or_License_your_IP.pdf
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THE DECISION TO LICENSE – PRELIMINARY ANALYSES
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Examination of the Property Involved
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Intellectual property and/or other rights
Market penetration
Competition
Type(s) of products and their uses
Ease of use
Substitutes
Cultural differences
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International market differences
Noren dai example
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13. Domestic and International Licensing
IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS
 Royalties and Pricing
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Geographic Limitations
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“Fair” royalties under some circumstances
Pricing licensed products and controls
Compulsory licenses
Country and smaller limitations
Other considerations
Exclusive and non-exclusive
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Does “exclusive” include licensor?
Are non-exclusive mandatory?
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Japanese and other guidelines
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IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS
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Single or Multiple Licenses
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Product Markets and Other Uses
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For same licensee – termination issues for licensor and
licensee
For multiple licensees
Type(s) of products, excluding other types
Recognition of Rights
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Indonesia not member of Berne Convention
China has had very tough IP laws, including the death
penalty in the past
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IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS
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Development of New and Related IP
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Planning for the Future
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Development work, including cross-licenses and other
similar issues
Is IP related?
Is IP new or related?
Improving the past
New technologies for the future
“Open” Innovation Model for Success
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Microsoft versus Apple, Intel versus Samsung
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IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS
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Quality, Production and Other Controls
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Sales and Marketing
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Joint development and/or sharing
Documentation of Activities and Other
Information
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Essential to retain trademark
Business necessity
Pricing
Sales and monetization of licensed products and IP
Information shared and developed
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IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS
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Receptacles and Other Issues
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The importance of shapes in product licensing
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The automotive industry
Efficiencies and the merger of products and supply lines
Websites and Confusing Ownership Issues
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IT business process patents
Marketing process patents
Outsourcing design and development
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LICENSING MANAGEMENT – HOW CAN WE GET IT TOGETHER?
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Full-time Internal or External Licensing Group
Rights Audits
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Rights Process Development and Maintenance
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Licensing-in preparation, identification, and confirmation
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Typically called IP audits, expanded uses and issues
requires broader rights audits to determine ownership of
rights and avoid loss of revenue.
Internal and external
International program to license in for one-time project for
government entity
IP registration and maintenance systems
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19. Domestic and International Licensing
LICENSING MANAGEMENT – DID WE GET IT TOGETHER?
http://www.myce.com/news/music-licensing-a-nightmare-in-the-digital-world-33265/
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IP, MORAL RIGHTS AND INTERNATIONAL PROTECTION
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Berne Convention, Article 6bis:
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(1) Independently of the author's economic rights, and even after
the transfer of the said rights, the author shall have the right to
claim authorship of the work and to object to any
distortion, mutilation or other modification of, or other derogatory
action in relation to, the said work, which would be prejudicial to
his honor or reputation.
(2) The rights granted to the author in accordance with the
preceding paragraph shall, after his death, be maintained, at
least until the expiry of the economic rights, and shall be
exercisable by the persons or institutions authorized by the
legislation of the country where protection is claimed.
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LICENSING AND MORAL RIGHTS AND IP PROTECTION
 US and Great Britain largely reject moral rights
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Tom Waits litigation in Spain and Germany were among
lawsuits brought by US artists to enforce their moral rights
Recognized Waits has moral right in unique voice
Moral Rights Exist In Europe and Elsewhere Even
After Artist’s Death
Charlie Chaplin and Pablo Picasso
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Have had separate licensing agencies for (1) moral rights
owned by the person and family and (2) rights in the works
of art themselves
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