The document outlines key considerations for drafting and reviewing licenses and agreements, focusing on concepts rather than specific language. It emphasizes the importance of clarity in terms such as exclusivity and transferability, highlights potential issues like conflicts of interest, and discusses financial arrangements including royalties and indemnity. Additionally, it addresses the roles of licensors and licensees, confidentiality, compliance, and the consequences of termination.

2.  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

3.  Business Terms - Use of a
term sheet or Memorandum
of Understanding
 Reviewing the first draft
 Associated Documents

4.  Not legally binding
 Statement of
background and
intentions
 Good place to identify
problems such as
conflicts of interest

5.  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

6.  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

7.  Reservation of certain rights by the
Licensor
 Non-commercial purposes

8.  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

9.  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

10.  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

11.  Use and scope of an indemnity
 Limitation on amount of claim

12.  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”

13.  Permitted circumstances of disclosure
 What constitutes “confidential
information”
 Importance of confidentiality for trade
secrets or know-how

14.  Report of activities with respect to
exploitation of the technology
 Frequency
 Right to audit
 Accounting
standards

15.  Term of the license
 Events of termination
› Automatic (insolvency)
› Curable breaches
 Termination process
 Consequences to sub-licensees of
terminating the head licence

16.  Public liability or product liability
insurance
 Absolute need for both in most
circumstances
 Indemnity vs. Insurance

17.  Proper law of the contract
 Attornment clause

18. Marcel D. Mongeon
+1 (905) 390 1818
marcel@mongeonconsulting.com