This document discusses key considerations for intellectual property (IP) licensing in outsourcing and technology agreements. It begins by defining intellectual property and distinguishing it from confidential information. It then provides an overview of different IP regimes like copyright, patent, and trademark. The document also addresses issues like work made for hire clauses, joint ownership of IP, representations and warranties about IP, and indemnification related to IP infringement. It aims to help navigate complex IP issues that can arise in multi-party technology transactions and outsourcing agreements.

1. LA / NY / SF / DC / arentfox.com
IP Licensing in
Outsourcing and
Tech Agreements
William A. Tanenbaum
Co-Head, Technology Transactions

2. Conflating IP and Subject Matter
Definition of Intellectual Property: “Intellectual
Property means copyrights, patents,
trademarks, domain names, software (in
object code and source code form),
confidential information”
Definition of Confidential Information:
“includes . . . all IP . . .”
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3. Intellectual Property Regimes
Copyright
Patent
Trade Secret
Trademark and Service Mark
Moral Rights
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4. IP Protection for Data
Compilation
Realities of multi-party transactions
Data sharing > data ownership
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5. Work Made for Hire
“The Parties agree that all Custom Work
Product created for the Customer shall
constitute works made for hire.”
Effect of clause on ownership and payment
Ripple effects:
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6. IP Law Different from Businessperson’s
Reflexive Positions
“I pay, I own”
– Work Made for Hire
Joint ownership
Problems
– Right of joint owner
– Free R&D?
– Is it joint? Authorship vs. inventorship
– Control patent prosecution
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7. Ownership if Not a Work Made for Hire….
Assignment
– Not just copyright, all IP
Continuing obligation
Upstream assignments
– Otherwise a license right
Record
– Pre-agree to PTO/Copyright Office form
Register copyright
– Handling data
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8. Moral Rights
Arise in international agreements
– … or in inherited forms
“Provider hereby licenses and agrees to
license to Licensee Provider’s moral rights
and droit morale in the Work Product.”
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9. Moral Rights (continued)
“Provider will cause each individual providing
work product to waive his or her moral rights.”
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10. Dynamic Online EULAs
Problem: future unilateral amendment by
provider/vendor/licensee
Addressing the problem:
– Amendments in standalone document
– Delete and replace entire provision
– State that licensee-specific amendments
survive future unilateral licensor amendments
– Make reference to section title as well as
number
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11. Cloud Product Under EULA and Software
Vendor’s Custom Work for Customer
Need to coordinate two agreements
Issue: EULA gives provider ownership of
suggestions
– Does this cover actual coded improvements?
Addressing Licensee’s risks
– Indemnity
– Vendor and EULA platform try to resolve but
customer has no liability to Vendor
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12. Ownership and License Rights
in Custom Work Product
Box A Box B Box C Box D Box E
Provider
Base
Software
Provider
Derivative
Work
Provider
Custom
Derivative
Work
Final
Custom
Work
Product
Derivative
Works of
Custom
Work
Product
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13. Joint Development Agreement
Combined Enhanced by Hardware Company
Combined Enhanced by Software Company
Combined Hardware and Software
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Hardware Company
DR/New Work
Software Company
DR/New Work
Hardware Company
Preexisting
Software Company
Preexisting

14. Jointly Owned IP
Inventorship vs. authorship – may not be joint
Potential Problems
Dispute over what is “primarily related” for
technology
– Especially for IP that can be used outside the joint
venture
– When developed primarily by one party based on
confidential information of the other
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15. Software IP Licenses
“Use” is a patent not copyright time
Section 106: reproduce, prepare derivative
works, distribute, display publicly, and for
sound recordings, perform publicly
May omit common software operations:
– install, operate, deploy, make available or
accessible on servers, etc., integrate and make
interoperable
Will “worldwide” be sufficient?
– But territoriality of IP rights
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16. IP Reps and Warranties
Owns or has license to IP
– Qualification: as between the parties
No pending litigation or claim of IP alleging IP
– To knowledge after diligent inquiry (officer)
– Which if adjudicated against Licensor would
interfere with: rights granted or intended to be;
provide Services; interfere with use of Licensor’s
technology
– Infringement claims for licensed IP
– Except as scheduled
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17. IP Reps and Warranties (continued)
No invitation to license; no patent claim chart
Except as scheduled (Licensee: not interfere)
Not aware of a claim and not received notice
– Limit to senior employee or relevant department
Technology not contain third party IP unless
identified
– Need connection to indemnification
No other IP license needed
Pass-through (including for COTS)
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18. IP Reps and Warranties (continued)
Licensor can make assignments (custom)
Breach of contract vs. infringement
– Double recovery
Cover IP used in supply chain
Covenants re IP infringement
Not challenge Licensee’s IP rights
– Exclude incorporated Licensor rights
Licensor will comply trademark requirements
Warranty pass-through (COTS)
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19. Settlements under Indemnification
Obligations
Subject to licensee approval in full discretion;
or
Subject to approval which cannot be
unreasonably withheld, conditioned or
delayed, but only if:
– Unconditional litigation release
– Does not require admission of liability
– Does not require payment or action
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20. License from Licensee
Limitations:
– For purposes of engagement
– During Term
– What about Licensee reps and warranties?
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21. Indemnity Exclusions and Exclusions to
Exclusions
Combinations
– Not authorized (including by subcontractors)
Exclusion from exclusion:
– *solely to extent combination caused the
infringement
Not used as designed or intended to be used
Modifications
– Unauthorized (including by subcontractors)
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22. Indemnity Exclusions (continued)
Derivative Works
– But upgrades
Failure to discontinue alleging infringing
software after direction from Licensor
Where Licensor met specific requirements of
Licensee
Key: exclusion to exclusion -- “solely to the
extent [exception to the exception] caused the
infringement”
– May divide liability in infringement action
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23. Impact on Arbitration Clause
Requires arbitrator with IP knowledge
But parties may exclude IP from arbitration
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24. Data at C-Suite
Who does what?
CDO vs. CIO
CIO vs. CTO
CAO vs. CDO
Privacy is contextual
Litigation retention vs. revenue
Cybersecurity vs. revenue
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25. Customer-Facing Outsourcing
“Traditional” focus on internal cost savings
Next generation outsourcing will be front-office
revenue generation
Goal: faster, more targeted product
development
B2B and B2
All data enabled
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26. Who is the “Reader” of the IP and License
Agreement?
Need litigator skill
Opposing in-house counsel
Arbitrator
– What will be disputed?
Aim towards summary judgment
Lesson: technical schedules need to be legal
documents
One-sided evidence
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27. Questions and Answers
William A. Tanenbaum
Co-Head, Technology
Transactions
Arent Fox LLP
William.Tanenbaum@arentfox.com
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28. William A. Tanenbaum, Arent Fox LLP
William A. Tanenbaum was named as one of the Top Five IT lawyers in the country
by Who’s Who Legal in 2016, and was previously named as “Lawyer of the Year”
in IT in New York by US News & World Report/Best Lawyers. Chambers named
Bill as one of only five lawyers in Band One in Outsourcing & Technology in New
York, in Band Two nationally, and as a Leading Outsourcing Lawyer in its global
edition. Legal500 found that he is a “Leading Authority” on Technology &
Outsourcing. He was selection for inclusion in the inaugural edition of Who’s Who
Legal: Thought Leaders 2017. Bill is a Past President of the International
Technology Law Association. He is currently a Vice President of the Society for
Information Management (SIM) (New York Chapter), and industry CIO
organization, and the only lawyer on the Board of Directors.
Clients endorse Bill as “a brilliant lawyer. I cannot imagine working with anyone
else;” “brings extremely high integrity, a deep intellect, fearlessness and a
practical, real-world mindset to every problem;” “efficient, solution-driven and
makes excellent judgment calls” (Chambers); "one of the best IP lawyers I have
worked with" and "knows exactly how to get a deal done” (Clean Tech and Who's
Who Legal).
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