The document summarizes key aspects of licensing agreements that every business lawyer should know. It discusses what can be licensed, including intellectual property rights like copyrights, patents, trademarks and trade secrets. It also outlines common provisions in licensing agreements such as the scope of the license, pricing terms including royalties and fees, audit rights, warranties, and indemnification obligations. Business reasons for granting licenses are also provided, such as allowing another party to exploit the intellectual property while retaining control, or enabling multiple players to penetrate a market more quickly.
The document discusses key issues to consider when drafting licensing agreements, including:
- Properly describing the licensed intellectual property and rights being granted
- Specifying compensation, license duration, and circumstances for revocation
- Negotiating indemnification for intellectual property infringement claims and liability limitations
- Allocating risks related to warranty breaches, product defects, and third party claims
The presenter provides sample indemnification language and discusses balancing the interests of licensors and licensees.
Licensing involves granting permission to use legally protected properties like trademarks or copyrights. Licensing agreements specify the terms under which the licensee can use the property in exchange for fees. Key aspects of licensing agreements include the type of license granted, territory covered, duration and renewal terms, fees and payments, termination clauses, and effects of termination. Well-structured agreements benefit both licensors by expanding their brands and generating revenue, and licensees by leveraging well-known properties to increase sales.
This document discusses four lessons learned in handling license agreements:
1) Licenses always entail some risk to the licensee's freedom to operate as the licensee does not have complete control over the intellectual property.
2) Complex license structures can invite misunderstanding between the licensor and licensee.
3) Business people and lawyers may have different interests in structuring agreements, with lawyers focused on contingency and business people on timelines.
4) When negotiating, understand both sides' cost-benefit considerations, such as expected damages, legal fees, and the negotiation range.
Licensing involves a contractual agreement between a licensor and licensee where the licensor grants permission to the licensee to use certain intellectual property or technologies. Key terms of a licensing agreement specify the territory, time period, and scope of use being licensed. There are different types of licensing including patent, trademark, and copyright licensing. Licensing provides benefits like quick market access and risk reduction for small companies, but also disadvantages like creating future competitors and limited control over the licensed intellectual property.
This document provides an overview of various asset and fund-based financial services. It discusses topics like lease finance, consumer credit, factoring, bills discounting, and housing finance. For lease finance, it defines different types of leases and outlines the steps involved in a leasing transaction. It also covers hire purchase agreements and compares leasing to hire purchase. The document then discusses factoring, defining it and outlining the key functions performed by factoring companies. It concludes with a brief discussion of bills discounting.
This document discusses key legal aspects of IT contracts, including:
1) IT projects often fail due to unrealistic expectations, poorly defined requirements, or lack of communication and management. Clear contracts can help prevent these issues.
2) Contracts must clearly define intellectual property ownership, as software ownership underlies the industry. There are four main types of intellectual property rights related to software.
3) Effective contracts include provisions addressing confidentiality, warranties, liability, indemnification, termination, and dispute resolution to protect both parties' interests in the project.
This document discusses different types of patent licensing. It defines patent licensing as granting permission to a third party to use, sell, and benefit from a patented invention in exchange for royalty payments. There are several types of patent licenses: exclusive licenses grant all rights except title to one licensee; non-exclusive licenses allow a patent owner to grant rights to multiple parties; sub-licenses are granted by licensees to third parties; and cross-licenses allow an exchange of licenses between companies. The document also discusses advantages like risk transfer and access to global markets, as well as challenges like loss of control and difficulty finding licensees.
The document discusses various types of patent licensing including exclusive, non-exclusive, and royalty-free licenses. It describes key components of a patent license agreement such as background, definitions, license grants, royalties, technical assistance, warranties, terms, termination, recording, and obligations of parties. The document also discusses licensing strategies, antitrust considerations, compulsory licensing, and tips for negotiating patent license agreements.
The document discusses key issues to consider when drafting licensing agreements, including:
- Properly describing the licensed intellectual property and rights being granted
- Specifying compensation, license duration, and circumstances for revocation
- Negotiating indemnification for intellectual property infringement claims and liability limitations
- Allocating risks related to warranty breaches, product defects, and third party claims
The presenter provides sample indemnification language and discusses balancing the interests of licensors and licensees.
Licensing involves granting permission to use legally protected properties like trademarks or copyrights. Licensing agreements specify the terms under which the licensee can use the property in exchange for fees. Key aspects of licensing agreements include the type of license granted, territory covered, duration and renewal terms, fees and payments, termination clauses, and effects of termination. Well-structured agreements benefit both licensors by expanding their brands and generating revenue, and licensees by leveraging well-known properties to increase sales.
This document discusses four lessons learned in handling license agreements:
1) Licenses always entail some risk to the licensee's freedom to operate as the licensee does not have complete control over the intellectual property.
2) Complex license structures can invite misunderstanding between the licensor and licensee.
3) Business people and lawyers may have different interests in structuring agreements, with lawyers focused on contingency and business people on timelines.
4) When negotiating, understand both sides' cost-benefit considerations, such as expected damages, legal fees, and the negotiation range.
Licensing involves a contractual agreement between a licensor and licensee where the licensor grants permission to the licensee to use certain intellectual property or technologies. Key terms of a licensing agreement specify the territory, time period, and scope of use being licensed. There are different types of licensing including patent, trademark, and copyright licensing. Licensing provides benefits like quick market access and risk reduction for small companies, but also disadvantages like creating future competitors and limited control over the licensed intellectual property.
This document provides an overview of various asset and fund-based financial services. It discusses topics like lease finance, consumer credit, factoring, bills discounting, and housing finance. For lease finance, it defines different types of leases and outlines the steps involved in a leasing transaction. It also covers hire purchase agreements and compares leasing to hire purchase. The document then discusses factoring, defining it and outlining the key functions performed by factoring companies. It concludes with a brief discussion of bills discounting.
This document discusses key legal aspects of IT contracts, including:
1) IT projects often fail due to unrealistic expectations, poorly defined requirements, or lack of communication and management. Clear contracts can help prevent these issues.
2) Contracts must clearly define intellectual property ownership, as software ownership underlies the industry. There are four main types of intellectual property rights related to software.
3) Effective contracts include provisions addressing confidentiality, warranties, liability, indemnification, termination, and dispute resolution to protect both parties' interests in the project.
This document discusses different types of patent licensing. It defines patent licensing as granting permission to a third party to use, sell, and benefit from a patented invention in exchange for royalty payments. There are several types of patent licenses: exclusive licenses grant all rights except title to one licensee; non-exclusive licenses allow a patent owner to grant rights to multiple parties; sub-licenses are granted by licensees to third parties; and cross-licenses allow an exchange of licenses between companies. The document also discusses advantages like risk transfer and access to global markets, as well as challenges like loss of control and difficulty finding licensees.
The document discusses various types of patent licensing including exclusive, non-exclusive, and royalty-free licenses. It describes key components of a patent license agreement such as background, definitions, license grants, royalties, technical assistance, warranties, terms, termination, recording, and obligations of parties. The document also discusses licensing strategies, antitrust considerations, compulsory licensing, and tips for negotiating patent license agreements.
An Introduction to Legal Aspects of Customer Acquisitions for StartupsNow Dentons
In this presentation, FMC’s Gal Smolar discusses an introduction to the legal aspects of customer acquisitions for startups. The presentation focuses on customer acquisitions, acquisition contracts, trends, right to data, restrictive covenants, exclusivity, joint development and customer acquisition tips.
Gal Smolar is a partner in FMC’s Vancouver office. Gal is a Practitioner of Foreign Law and brings to Fraser Milner Casgrain his broad international experience in commercial and corporate law and in particular in the field of technology.
This document is a software license and support agreement between Embarcadero Technologies, Inc. and the licensee for InterBase XE3 software. It grants the licensee a non-exclusive, non-transferable license to use the software. It outlines the scope of the license, license types, support services provided, limitations of liability, intellectual property ownership, and other standard legal terms for a commercial software license.
International Business - licensing and franchisingKhyatiTongia
The document discusses licensing and franchising. It defines licensing as an agreement where a licensor grants a licensee access to patents, trademarks, or technology for a fee. Franchising is defined as an agreement where a franchisor allows a franchisee to use its brand name and logo to provide similar goods and services, while requiring the franchisee follow certain quality standards. The document outlines the key elements, advantages, and disadvantages of both licensing and franchising agreements. Examples of well-known licensed and franchised brands are also provided, as well as a comparison of the differences between licensing and franchising.
The patent licensing occurs when the licensor (patent holder) grants exploitation rights over a patent to a licensee for royalty or a lump sum payment. A licensee can challenge the validity of a licensed patent to avoid paying royalties, though there are some limitations, such as not being able to challenge after failing to pay royalties. The Supreme Court's MedImmune v. Genentech decision found that licensees can challenge licensed patents even while continuing to pay royalties, increasing licensees' freedom to challenge validity. Licensors may respond by negotiating higher royalties, up-front payments, or termination clauses.
This document is a master agreement between Environmental Systems Research Institute, Inc. (Esri) and a customer for Esri products and services. It grants the customer a non-exclusive, non-transferable license to access and use Esri offerings, including the right to copy documentation for internal use. The customer is authorized to allow consultants or contractors to host and use Esri offerings exclusively for the customer's benefit. All Esri offerings and intellectual property rights are reserved by Esri, except for rights that are expressly granted in the agreement.
This document is a master agreement between Environmental Systems Research Institute, Inc. (Esri) and a customer for Esri products and services. It grants the customer rights to access and use Esri offerings, including software, online services, and data. The agreement defines various license types that apply to Esri offerings and restricts the customer's use for the duration of the agreement or applicable subscriptions. It also includes terms of use for software, online services, and data.
Administrative and technology services outsourcingaliwaqas144
This document is an agreement between Envision Corporation and a client for the outsourcing of administrative services and technology development. Envision will provide services such as financial management, IT services including web hosting, customer support, and development support. Envision will host the client's website and allow Envision to use the site for product resale. The client will pay for services based on the ratio of Envision employees working on the account to total employees, plus overhead costs. Envision will also be compensated separately for additional development work.
This is the user manual of Launch X431 CReader VII+
>> READ MORE: https://www.obdadvisor.com/launch-creader-vii-plus-review/
Here is a detailed review of the scan tool based on my own experience, including:
- Compatibility
- Design and Specification
- Features and Functions
- Pros and Cons
Check it out to get the REVIEW and some NOTES about using this scanner.
This document summarizes a license agreement between Esri and a licensee for Esri products. It outlines general license terms, definitions, intellectual property rights, the scope of use for the products, terms and termination conditions, limited warranties and disclaimers of warranties, limitation of liability, and applicability of disclaimers. Key points include that the licensee may only use the products as outlined in the agreement and order documents, Esri owns all intellectual property rights to the products, the licensee has limited warranties and remedies for warranty issues, and Esri's liability is limited.
This document is a license agreement between Esri, a California corporation located at 380 New York St., Redlands, CA, and the licensee for Esri software products. It defines key terms, grants the licensee a nonexclusive personal license to use the products according to the agreement terms, and limits Esri's liability. The licensee must accept the terms to use the products.
The document discusses six key provisions that should be included in an outsourcing agreement to prevent potential pitfalls: 1) Protect intellectual property, 2) Ensure data privacy, 3) Require consent for subcontracting, 4) Include an exit strategy, 5) Establish dispute resolution procedures, and 6) Agree on processes to ensure security standards. Having a well-drafted outsourcing agreement with these provisions can help minimize risks when outsourcing business functions overseas.
The document discusses various aspects of copyright law and contracts related to conveying rights in creative works. It covers the three main models for conveying rights: assignment, where the owner sells copyrights; works made for hire, where rights are assigned by agreement; and licensing, where rights are rented through a non-exclusive or exclusive license. It also provides examples of language that can be used in contracts for assignments, works made for hire, and licensing agreements.
This presentation reviews key provisions of source code escrow agreements including (i) how to define escrow deposits; (ii) the importance of verfication services; and (iii) definitions of release events. The presentation also considers other uses of escrow such as SaaS escrow. It concludes by looking at IP licenses under s. 365(n) of the U.S. Bankruptcy Code and under s. 65.11 of the recently amended Canadian Bankruptcy and Insolvency Act.
This document discusses various legal issues entrepreneurs should consider, including intellectual property (patents, trademarks, copyrights, trade secrets), selecting lawyers, patent types and processes, trademarks, copyrights, trade secrets, licensing, product safety and liability, insurance, the Sarbanes-Oxley Act, and contracts. It provides information on each topic and considerations for entrepreneurs.
This document discusses various legal issues that entrepreneurs should consider, including intellectual property (patents, trademarks, copyrights, and trade secrets), selecting lawyers, patent types and processes, trademarks, copyrights, trade secrets, licensing, product safety and liability, insurance, the Sarbanes-Oxley Act, and contracts. It provides information on each topic and considerations for entrepreneurs.
This lecture include introduction to software contracts. Before starting development companies prepare agreement document to deal with conflicts afterwards.
Cork Open Coffee David Reilly 24 July 09Gordon Murray
1. The document discusses the legal framework for software creation and protection under Irish law. Copyright protects the expression of software as a literary work but not the underlying ideas.
2. It outlines the types of intellectual property that can apply to software, including copyright, database rights, design rights and patents. Joint ventures and licensing agreements are discussed as methods of software exploitation.
3. Key considerations for software development agreements are addressed, such as ownership of the software, warranty periods, intellectual property indemnification, and maintenance obligations. Investor expectations and exit strategies are also covered.
Software developer agreements baby veena johnAltacit Global
The document outlines key components of a software development agreement, including:
1) The parties involved, description of the project, payment terms, and intellectual property rights assignment specifying that the client owns the software code.
2) Warranties that the software will perform as specified along with indemnification against third party intellectual property claims.
3) Confidentiality of sensitive information, terms for termination, and dispute resolution procedures such as arbitration.
4) Provisions regarding copyright ownership transfer to the client unless otherwise specified, and issues around using copyrighted/public domain materials in software/websites.
Which brands are succeeding with social and how are they doing itDavid Libby
The document discusses brands that are succeeding on social media and their strategies. It provides examples of Absolut using online video, Intuit using customer ratings and reviews, Starbucks using crowdsourcing, Timberland using applications, Zynga using social games, Gap using mobile applications, and MTV/BET/Spike using a Ning social network. Each brand's social media program is described as empowering customers, engaging communities, and providing potential public relations benefits.
This document discusses trends in social media use for HR professionals and provides tips for leveraging social media. It finds that HR professionals spend over 3 hours per week consuming social media for work. They use it primarily for online content and vendor research. The document then provides advice on using social media to engage employees, build personal brands, learn from peers, and create an effective Facebook profile. It concludes with suggestions for measuring social media success and contact information.
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Similar to 2007 Sei Handout What Every Business Lawyer Needs To Know About Licensing Dana Shultz
An Introduction to Legal Aspects of Customer Acquisitions for StartupsNow Dentons
In this presentation, FMC’s Gal Smolar discusses an introduction to the legal aspects of customer acquisitions for startups. The presentation focuses on customer acquisitions, acquisition contracts, trends, right to data, restrictive covenants, exclusivity, joint development and customer acquisition tips.
Gal Smolar is a partner in FMC’s Vancouver office. Gal is a Practitioner of Foreign Law and brings to Fraser Milner Casgrain his broad international experience in commercial and corporate law and in particular in the field of technology.
This document is a software license and support agreement between Embarcadero Technologies, Inc. and the licensee for InterBase XE3 software. It grants the licensee a non-exclusive, non-transferable license to use the software. It outlines the scope of the license, license types, support services provided, limitations of liability, intellectual property ownership, and other standard legal terms for a commercial software license.
International Business - licensing and franchisingKhyatiTongia
The document discusses licensing and franchising. It defines licensing as an agreement where a licensor grants a licensee access to patents, trademarks, or technology for a fee. Franchising is defined as an agreement where a franchisor allows a franchisee to use its brand name and logo to provide similar goods and services, while requiring the franchisee follow certain quality standards. The document outlines the key elements, advantages, and disadvantages of both licensing and franchising agreements. Examples of well-known licensed and franchised brands are also provided, as well as a comparison of the differences between licensing and franchising.
The patent licensing occurs when the licensor (patent holder) grants exploitation rights over a patent to a licensee for royalty or a lump sum payment. A licensee can challenge the validity of a licensed patent to avoid paying royalties, though there are some limitations, such as not being able to challenge after failing to pay royalties. The Supreme Court's MedImmune v. Genentech decision found that licensees can challenge licensed patents even while continuing to pay royalties, increasing licensees' freedom to challenge validity. Licensors may respond by negotiating higher royalties, up-front payments, or termination clauses.
This document is a master agreement between Environmental Systems Research Institute, Inc. (Esri) and a customer for Esri products and services. It grants the customer a non-exclusive, non-transferable license to access and use Esri offerings, including the right to copy documentation for internal use. The customer is authorized to allow consultants or contractors to host and use Esri offerings exclusively for the customer's benefit. All Esri offerings and intellectual property rights are reserved by Esri, except for rights that are expressly granted in the agreement.
This document is a master agreement between Environmental Systems Research Institute, Inc. (Esri) and a customer for Esri products and services. It grants the customer rights to access and use Esri offerings, including software, online services, and data. The agreement defines various license types that apply to Esri offerings and restricts the customer's use for the duration of the agreement or applicable subscriptions. It also includes terms of use for software, online services, and data.
Administrative and technology services outsourcingaliwaqas144
This document is an agreement between Envision Corporation and a client for the outsourcing of administrative services and technology development. Envision will provide services such as financial management, IT services including web hosting, customer support, and development support. Envision will host the client's website and allow Envision to use the site for product resale. The client will pay for services based on the ratio of Envision employees working on the account to total employees, plus overhead costs. Envision will also be compensated separately for additional development work.
This is the user manual of Launch X431 CReader VII+
>> READ MORE: https://www.obdadvisor.com/launch-creader-vii-plus-review/
Here is a detailed review of the scan tool based on my own experience, including:
- Compatibility
- Design and Specification
- Features and Functions
- Pros and Cons
Check it out to get the REVIEW and some NOTES about using this scanner.
This document summarizes a license agreement between Esri and a licensee for Esri products. It outlines general license terms, definitions, intellectual property rights, the scope of use for the products, terms and termination conditions, limited warranties and disclaimers of warranties, limitation of liability, and applicability of disclaimers. Key points include that the licensee may only use the products as outlined in the agreement and order documents, Esri owns all intellectual property rights to the products, the licensee has limited warranties and remedies for warranty issues, and Esri's liability is limited.
This document is a license agreement between Esri, a California corporation located at 380 New York St., Redlands, CA, and the licensee for Esri software products. It defines key terms, grants the licensee a nonexclusive personal license to use the products according to the agreement terms, and limits Esri's liability. The licensee must accept the terms to use the products.
The document discusses six key provisions that should be included in an outsourcing agreement to prevent potential pitfalls: 1) Protect intellectual property, 2) Ensure data privacy, 3) Require consent for subcontracting, 4) Include an exit strategy, 5) Establish dispute resolution procedures, and 6) Agree on processes to ensure security standards. Having a well-drafted outsourcing agreement with these provisions can help minimize risks when outsourcing business functions overseas.
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1. The document discusses the legal framework for software creation and protection under Irish law. Copyright protects the expression of software as a literary work but not the underlying ideas.
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2007 Sei Handout What Every Business Lawyer Needs To Know About Licensing Dana Shultz
1. What Every Business Lawyer Needs to Know about Licensing
Copyright 2006 Dana H. Shultz
Who, what, where, when and why
1. Licensor grants to licensee
2. Permission to undertake specified activities with respect to specified subject matter
3. Specified territory or worldwide
4. Specified duration or potentially infinite; conditions of revocability
5. Licensor retains ownership and is compensated by licensee for grant of rights
What can be licensed
6. All or a subset of the licensor’s rights, short of transferring ownership
Difference between a broad exclusive license and assignment: Whereas a licensee may always be
concerned about termination of the license, an assignee need not have the same concern.
7. Copyright
Right to reproduce, prepare derivative works, prepare copies, perform publicly or display
publicly – 17 U.S.C. § 106
8. Patent
Right to exclude others from making, using, selling, offering for sale or importing the claimed
invention – 35 U.S.C. § 271
9. Trademark
Right to prevent others from using a confusingly similar mark – 15 U.S.C. § 1114
10. Trade secret
Right to use information that derives value from not being generally known and is subject to
reasonable efforts to maintain secrecy – Cal. Civ. Code § 3426.1(d)
11. May be expressed in terms of product rather than intellectual property (IP)
Example: “Adobe grants to you a nonexclusive license to Use the Software for the purposes
described in the Documentation as follows.”
What Every Business Lawyer Needs to Know about Licensing Page 1 of 10
Dana H. Shultz 510 5470545 dana@danashultz.com
2. Why licenses are granted (examples of business reasons)
12. Licensee can exploit but licensor controls (e.g., franchises)
Example: “[Cendant Corporation], for itself and its subsidiaries, hereby grants to the Licensee
and its subsidiaries the exclusive right and license to use the Marks [pertaining to real estate
brokerages] in the conduct of the Business…. In conjunction with the use of the Marks, the
Licensee shall take all necessary measures to ensure that the services provided by Licensee and
its subsidiaries continue to conform to quality standards.”
13. IP owner not in a position to manufacture product
Example: “Research In Motion Limited (RIM) … and NTP, Inc. (NTP) today announced that
they have signed a definitive licensing and settlement agreement…. RIM has paid NTP $612.5
million in full and final settlement of all claims against RIM, as well as for a perpetual, fullypaid
up license going forward…. The licensing and settlement agreement relates to all patents owned
and controlled by NTP and covers all of RIM's products, services and technologies…, including
its BlackBerry® related business.”
14. IP enhances existing products
Example: “Bacterin International designs, tests and licenses bioactive coatings [to] medical
device manufacturers….”
15. Multiple players can penetrate market(s) more quickly
Example: Microsoft licensing of DOS and Windows to PC manufacturers vs. Apple’s restriction
of its operating systems to Macintosh computers.
Mostimportant / mostnegotiated provisions
16. Scope of license – permitted activities
See, e.g., Sections 7 through 10 of this document.
17. Scope of license – licensee’s contractors / sublicensees
Example: “Licensee will have, and Licensor hereby grants to Licensee, the right to grant
sublicenses to third parties under the License so long as Licensee pays, with respect to such
sublicenses, all applicable Royalties.”
Example: “Attached hereto as Exhibit G is Licensor's Supplier Code of Conduct (the "Code")
which applies to any entity manufacturing merchandise under the Tommy Hilfiger® label
(including the components thereof). Licensee shall ensure that Licensee, and all Sublicensees,
Third Party Manufacturers, subcontractors and suppliers comply with the terms of the Code….”
18. Scope of license – quantity / geographic / technical / industry limitations
Example: “Customer may (1) use the Software for production purposes in more than one IBM
Customer Information Control System (CICS) or equivalent address space on each Designated
What Every Business Lawyer Needs to Know about Licensing Page 2 of 10
Dana H. Shultz 510 5470545 dana@danashultz.com
3. Mainframe only if each is running under one copy of IBM Multiple Virtual Storage (MVS) or
LPAR or equivalent and the multiple CICS address spaces are communicating with each other
using IBM MultiRegion Option (MRO) or equivalent; (2) use the Software, for test and
development purposes only, in one additional CICS address space of a licensed CPU/LPAR/MVS
on the Designated Mainframe; and (3) use the Software on the Designated PCs or Servers; for the
stated Applications; and within the stated Usage Limits.”
19. Price – upfront payment
Example: “As nonrefundable consideration for grant of the License, Licensee will pay Licensor
the sum of $100,000.00 (one hundred thousand dollars) by wire transfer of immediately available
funds promptly upon execution of this Agreement.”
20. Price – recurring payments / license fees / advances against royalties
Example: “For the first four (4) Agreement Years, Licensee will pay to Licensor the minimum
amounts set forth in the following schedule (the “Minimum Annual Royalty”). Each of these four
(4) payments shall be due and payable on the anniversary of the Effective Date of this
Agreement.”
21. Price – royalties
Example: “As additional consideration for grant of the License, Licensee shall pay to Licensor
‘Licensed Product Royalties’ in the amount of 4% (four percent) of the Net Selling Price for
Licensed Products sold.”
22. Revenue basis for computing royalties
Example: “‘Net Selling Price’ means the gross invoice revenue received by Licensee (or
Licensee’s sublicensee, as applicable) for the sale or other provision of the Licensed Product, less
the sum of the following actual and customary deductions, where applicable: (a) discounts and
rebates against such revenue; (b) sales, use, withholding, excise and other taxes, tariffs,
import/export duties, and transportation charges, to the extent included in such revenue (but
excluding taxes on the net income of Licensee and its sublicensees); (c) allowances or credits
because of rejections or returns; and (d) loss or damage in transit that is not reimbursed.”
23. Audit provisions
Example: “During the term of this Agreement and for two years thereafter, Licensee will keep
full, true and accurate records containing information required to confirm all amounts payable to
Licensor hereunder. Upon reasonable notice, Licensor or its accountant may inspect and audit
said records on an annual basis during normal business hours to verify Licensee’s payments
hereunder and compliance with this Agreement. Licensor will bear the fees and expenses of such
inspection and audit unless same reveals that Licensee has underpaid Licensor by at least 10%
(ten percent) during any calendar year, in which case Licensee will promptly reimburse Licensor
for such fees and expenses.”
24. Associated services
Example: “Upon Customer’s payment of the amounts set forth in the Annual Maintenance
column of Attachment 1 and so long as Customer is not in material breach of this Agreement, for
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4. one year from the Effective Date Supplier will provide Maintenance and Support for the Products
for which such payment was made. ‘Maintenance and Support’ means the services specified in
Attachment 4.”
25. Warranties and indemnification
Example: “THE ENCLOSED SOFTWARE IS PROVIDED ‘AS IS’, WITHOUT WARRANTY
OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO THE SOFTWARE, AND ANY OTHER ACCOMPANYING
MATERIALS.”
Example: “Supplier warrants that (a) except as set forth in applicable Documentation, Software
will not contain any disabling code or similar device that prevents Customer from using Software
in the intended manner; (b) to the best of Supplier’s knowledge, Software does not contain any
computer virus or other malicious code that will cause material damage to Customer; and
(c) Supplier will provide Services in a professional and workmanlike manner to standards
generally accepted in the industry. Customer’s exclusive remedy for a material breach of
warranty with respect to a Product will be to require Supplier to use commercially reasonable
efforts to bring the Product into conformance with the warranty. Customer's exclusive remedy for
a material breach of warranty with respect to a Service will be to require Supplier to reperform
the Service in accordance with the warranty. THE FOREGOING WARRANTIES AND
REMEDIES CONSTITUTE THE ONLY WARRANTIES WITH RESPECT TO PRODUCTS
AND SERVICES, AND CUSTOMER'S EXCLUSIVE REMEDIES FOR BREACH OF THOSE
WARRANTIES. THESE EXPRESS WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS, OR IMPLIED. SUPPLIER
EXPRESSLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY, AN ANY
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTY OF
NONINFRINGEMENT.”
Example: “Supplier will defend, indemnify and hold Customer harmless from all costs, expenses,
and damages arising from any thirdparty claim alleging that any Software or Documentation
infringes any U.S. patent, copyright, trade secret, or other intellectual property right (a “Claim”),
provided that Customer has given Supplier prompt notice of the Claim, allows Supplier sole
control of the defense of the Claim and of all negotiations for its settlement or compromise, and
cooperates in all reasonable ways with Supplier's defense or settlement of the Claim. Supplier
will have no liability to Customer for any Claim that is based on or arises out of use of Software
in any environment other than the Authorized Environment. If a Claim results in an injunction
precluding Customer's use of the Software, Supplier will, at its option and expense, either:
(a) procure for Customer the right to continue the enjoined use; or (b) replace or modify the
Software or Documentation so it is no longer subject to the injunction. If Supplier, after all
commercially reasonable efforts, is unable to perform under either option (a) or (b) above, then,
upon Customer’s return of all Products to Supplier, and Customer’s certification to Supplier
under oath that it has destroyed all copies of the Software made by it, Supplier will refund to
Customer an amount equal to the undepreciated/unamortized balance of the Product Price carried
on Customer's books for U. S. federal income tax purposes as of the date that use of the Products
was enjoined.”
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5. 26. Limitations of liability and damages
Example: “NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL
OR CONSEQUENTIAL DAMAGES OF ANY NATURE OR FOR ANY REASON ARISING
OUT OF THIS AGREEMENT, OR FOR ANY CLAIM AGAINST THE OTHER BY ANY
THIRD PARTY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR
CLAIMS. THE MAXIMUM CUMULATIVE LIABILITY OF SUPPLIER FOR ANY AND
ALL DAMAGES ARISING OUT OF THIS AGREEMENT WILL NOT EXCEED THE TOTAL
AMOUNT THAT CUSTOMER HAS ACTUALLY PAID TO SUPPLIER HEREUNDER.”
27. Confidentiality
Example: “‘Confidential Information’ means nonpublic information about a Party that the other
Party gains access to in oral, written, electronic or any other form in the course of carrying out
this Agreement. Each Party will protect the other Party’s Confidential Information by (i) using it
only for the purposes of this Agreement, (ii) disclosing it only to the Party’s personnel strictly on
a needtoknow basis and not to any third party, (iii) taking such measures as it takes to protect its
own confidential information of like kind, and in any event a reasonable level of care, and
(iv) returning it and all copies thereof to the other Party on demand at any time with reasonable
notice. The obligations set forth in the preceding sentence will not apply in the event, and only to
the extent, that the Confidential Information is (i) already in the Party’s possession without
obligation of confidentiality, (ii) obtained from a source other than the other Party without
obligation of confidentiality, (iii) independently developed by the Party, (iv) disclosed by the
other Party to a third party without obligation of confidentiality, or (v) required to be disclosed by
applicable law or governmental order, in which case the Party will, as promptly as possible and
before making the disclosure, notify the other Party of its intention to make the disclosure.
28. Thirdparty infringement
Example: “In the event that at any time hereafter there is not pending a suit by Licensor against
an infringer of the Licensed Patent, then, in such case, Licensee will have the right to file suit
against such infringer, in the name of Licensor and at Licensee’s expense and for Licensee’s
benefit. Licensor consents to be a party and to cooperate with Licensee in any such suit brought
by Licensee pursuant to this paragraph.”
29. Invalidation of underlying IP
Example: “Royalties will be paid by Licensee on its products that use any invention covered by
any pending claim of the Patent Applications; provided, however, that if letters patent do not
issue within three (3) years after the date of this Agreement with a claim or claims covering an
invention used in Licensee’s products, and none of the Patent Applications (or continuations or
divisions of them) pending at the end of the three (3) years contains an allowed claim having such
coverage, Licensee may thereafter, at its option, terminate this agreement by giving thirty (30)
days’ notice to that effect to Licensor.”
30. Breach and remedies
Example: “A Party at any time may provide written notice to the other Party of termination of this
Agreement for a material breach thereof. Such termination will be effective ninety (90) days after
the date of the notice unless before the end of that period the other Party cured the breach
identified in the notice. If the breach is cured in the specified period, the notice of termination
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6. will be void and of no effect. The right of either Party to terminate under the provisions of this
Article will not be an exclusive remedy, and either Party will be entitled, if the circumstances
warrant, alternatively or cumulatively, to damages for breach of this Agreement, to an order
requiring performance of obligations of this Agreement, or to any other remedy available at law
or equity.”
31. Choice of law, jurisdiction and venue
Example: “This Agreement will be governed by and construed in accordance with the laws of the
State of California excluding its conflict of laws provisions. The Parties consent to the exclusive
jurisdiction of the state and federal courts in the County of Santa Clara, California and expressly
waive any objection or defense based on lack of personal jurisdiction or venue in connection with
any dispute arising out of or relating to this Agreement or its breach.”
32. Attorneys’ fees
Concern: Whether an attorneys’ fee provision increases the likelihood of litigation.
Cal. Civ. Code § 1717(a): In any action on a contract, where the contract specifically provides
that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either
to one of the parties or to the prevailing party, then the party who is determined to be the party
prevailing on the contract, whether he or she is the party specified in the contract or not, shall be
entitled to reasonable attorney's fees in addition to other costs….
Special considerations
33. Exclusivity
Exclusive license normally costs more than nonexclusive.
With respect to patent licenses, an exclusive licensee generally can sue infringers on its own
behalf.
34. Assignability
Assignment by licensee often is prohibited because licensor wants to (a) control who has access
to the technology (e.g., keep out of the hands of competitors) or (b) increase revenue.
35. Shrinkwrap
Opening package or using software constitutes acceptance of license terms. Limited case
authority is that shrinkwrap licenses are enforceable (which is appropriate if for no reason other
than economic practicality).
36. Clickthrough
User must click on “I agree” (or something similar) before using software. As with shrinkwrap
there is limited authority, but the argument for enforceability is at least as strong because the user
takes affirmative action acknowledging acceptance of terms.
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7. 37. Open source / free software
Users' freedom to run, copy, distribute, study, change and improve the software.
Example: GNU General Public License, http://www.gnu.org/copyleft/gpl.html
Risk: Incorporation of open source may change product from proprietary to open source.
38. OEM (Original Equipment Manufacturer) / reseller opportunities
Focus on (a) how licensee can modify / incorporate licensed technology and (b) rights licensee
can grant to its sublicensee customers.
39. Office lease + rooftop antenna license
Re real estate lease / license / easement, see, e.g., University of California, When to Use A Lease,
License, Easement, http://www.ucop.edu/facil/resg/leasing/documents/leaselicense.pdf.
40. Music
Public performance licenses – ASCAP, http://www.ascap.com; BMI, http://www.bmi.com;
SESAC, http://www.sesac.com
“Mechanical” (recording) licenses – Harry Fox Agency, http://www.harryfox.com
41. Notforprofit organizations
Licensors may provide morefavorable terms than normal.
42. Sales tax
There is no sales tax on prewritten software for California purchasers if it is downloaded
electronically or installed by the supplier (“load and leave”) and the customer does not receive
any tangible personal property. Cal. Bd. of Equalization Sales and Use Tax Reg. 1502(f)(1)(D),
http://www.boe.ca.gov/pdf/reg1502.pdf
43. U.S. government funding
Some government contracts restrict which costs can be reimbursed. May lead to contractor’s
request that licensor agree to characterize as royalties certain payments that normally could be
characterized otherwise.
44. U.S. government appropriation – eminent domain
The U.S. government does not license rights under patents or copyrights – it acquires rights under
its eminent domain powers and pays reasonable compensation.
èAsk Dana for a copy of his article, Patents, Copyrights, Government, California Bar Journal
(April 2005).
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8. 45. International licenses
Tends to make choiceoflaw negotiations (see Section 31) more significant and more
contentious.
Parties typically exclude application of the United Nations Convention on Contracts for the
International Sale of Goods. (Article 6: “The parties may exclude the application of this
Convention….”)
46. Moral rights
In many other countries: The right of an author to control the fate of his work to protect the
personal and reputational value of the work. May include the right to receive or decline credit,
prevent alteration, control ownership, or dictate whether or how displayed.
In the U.S.: Primarily applies to visual art under the Visual Artists Rights Act of 1990 (17 U.S.C.
§ 106A).
Moral rights cannot be assigned but can be waived. Particularly important issue for companies
having work done by contractors as well as employees (see next Section).
47. Startups and ownership of IP
You can’t license to customers a product that you don’t own!
è Ask Dana for a copy of his article, The Top Ten Intellectual Property Mistakes of Startup
Entrepreneurs.
48. Crosslicensing / more than two parties
Often used to resolve or avoid litigation between companies with large patent portfolios.
49. Noncompete provisions – scope and enforceability
Cal. Bus. & Prof. Code § 16600. Except as provided in this chapter, every contract by which
anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that
extent void.
Exceptions: § 16601 – sale of goodwill of business; § 16602 – dissolution of or disassociation
from partnership; § 16602.5 – dissolution of LLC.
50. Perfection of license rights to establish priority
Copyright – no online recordation; information at http://www.copyright.gov/document.html
Electronic Patent Assignment System (EPAS), http://epas.uspto.gov/
Electronic Trademark Assignment System (ETAS), http://etas.uspto.gov/
Cal. Comm. Code § 9505 allows the filing of a financing statement using the terms “licensor” and
“licensee” rather than “secured party” and debtor”.
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9. 51. Bankruptcy and escrows (protecting against the licensor going out of business)
If the debtor/licensor rejects and executory license, Bankruptcy Code § 365(n) allows the licensee
to (a) treat the license as terminated and assert damages for breach or (b) retain its rights under
the license (does not apply to trademarks or service marks).
Technology escrows – Iron Mountain, http://www.ironmountain.com/ipm/escrow/
Negotiation process
52. Business and legal interplay
Observation: A client’s interest in a legal issue is directly related to the issue’s potential impact
on the client’s business.
53. Risk vs. reward
Observation: The more conservative the company, the more it focuses on risk mitigation and the
less it focuses on reward enhancement.
54. Industry and players
Observation: Ownership of a patent does not guarantee that it can be licensed successfully. There
is no substitute for knowing key companies in the industry and where they are going.
55. Business and profitability models
Observation: The more the parties know about one another’s business and profitability models,
the more quickly and more easily they can negotiate appropriate license fees.
è Ask Dana for a copy of his article, Recognizing the Right Royalty Rate.
56. Common industry practices
Observation: A party’s perception of what is “standard” in the industry may reflect the party’s
history rather than the industry as a whole.
Resolving disputes
57. Escalation
Example: If any dispute arises, the parties’ project managers will try to resolve it within five
business days (or such other time period as the project managers may agree on). Failing such
resolution, the project managers will refer the dispute to their respective Vice Presidents for
resolution. If those personnel cannot resolve the dispute, the parties may pursue legal and
equitable remedies as set forth below.
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10. 58. Mediation and arbitration
Example: The parties agree to mediate any dispute or claim arising between them out of this
agreement before resorting to arbitration or court action. Mediation fees, if any, shall be divided
equally between the parties. If, for any dispute or claim to which this paragraph applies, any party
commences and action without first attempting to resolve the matter through mediation or refuses
to mediate after a request has been made, then that party shall not be entitled to recover attorneys’
fees, even if they would otherwise be available to that party in any such action.
Example: Any controversy or claim arising out of or relating to this contract, or the breach
thereof, shall be settled by arbitration administered by the American Arbitration Association
in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
Typically carved out (may seek equitable relief in court without requirement to post a bond):
Breach of license restrictions or confidentiality.
59. High cost of litigation
Intellectual property litigation is particularly expensive.
60. Courts’ (limited) expertise and (lack of) speed
In the Bay Area, federal and state courts in Santa Clara County (the heart of Silicon Valley)
generally are recognized as having superior knowledge of technology and the ability to move
cases relatively quickly.
This document is not intended as, and should not be considered, legal advice. Examples are illustrative
and do not necessarily represent best practices or legally sufficient provisions. If you need legal advice,
please utilize the services of a qualified attorney.
Dana H. Shultz is a businesssavvy licensing, intellectual property and technology transactions attorney
with an office in Piedmont. Before starting his own law practice (www.danashultz.com), he had more
than a decade of inhouse experience at companies ranging in size from preIPO to multinational. Dana’s
positions included Vice President and Legal Counsel at Visa International, General Counsel at Baron
Data Systems, and Senior Staff Attorney at LexisNexis. His work experience also includes management
consulting in information technology; litigation support marketing and sales; and software development,
all of which combine to give him an indepth understanding of business operations that adds value to his
legal skills and services.
Dana is a founding member of the Bay Area Business Attorneys Network, a member of the International
Technology Law Association and the Licensing Executives Society, and a contributor to the California
Bar Journal. He received an undergraduate degree in Communication Science from the University of
Michigan and a J.D. from the University of California at Berkeley, Boalt Hall School of Law.
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