licensing agreement terms
TRANSCRIPT
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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
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Business Terms - Use of a term sheet or Memorandum of Understanding
Reviewing the first draft Associated Documents
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Not legally binding Statement of
background and intentions
Good place to identify problems such as conflicts of interest
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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
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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
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Reservation of certain rights by the Licensor
Non-commercial purposes
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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
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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
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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
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Use and scope of an indemnity Limitation on amount of claim
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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”
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Permitted circumstances of disclosure What constitutes “confidential
information” Importance of confidentiality for trade
secrets or know-how
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Report of activities with respect to exploitation of the technology
Frequency Right to audit Accounting
standards
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Term of the license Events of termination
› Automatic (insolvency)› Curable breaches
Termination process Consequences to sub-licensees of
terminating the head licence
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Public liability or product liability insurance
Absolute need for both in most circumstances
Indemnity vs. Insurance
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Proper law of the contract Attornment clause