1 / 52

key aspects of ip license agreements

Skeleton of a License Agreement 5 Minutes. License Grant & Consideration 15 Minutes ... The Canadian Institute Key Business Agreements. Toronto, Ontario ...

salena
Download Presentation

key aspects of ip license agreements

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

    1. Key Aspects of IP License Agreements

    Donald M. Cameron The purpose of this document is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Ogilvy Renault or any member of the Firm on the points of law discussed. © D. Cameron 2006 The Canadian Institute – Key Business Agreements Toronto, Ontario

    2. Agenda

    IP Rights 5 Minutes Skeleton of a License Agreement 5 Minutes License Grant & Consideration 15 Minutes Licensor & Licensee Obligations 10 Minutes Common Clauses 5 Minutes Questions 5 Minutes

    3. What is Intellectual Property?

    It’s not the right to do something It’s the right to exclude others Legal monopoly Limited in time Limited in territory “License to litigate”

    4. The Legal Cubby-holes

    5. Patents

    “Applied science” Machines Processes Compositions of matter Drugs Certain software processes (limited)

    6. Patents

    Prerequisites: New Useful Inventive (non-obvious)

    7. Patents

    New (Novelty): Never been done, used, written about before Made available to the public Useful (Utility): It works It achieves the promise

    8. Patents

    Inventive (non-obvious): Any idiot would not have thought of it A person of ordinary skill in the area With no inventive abilities Would have been led to the solution Directly and without difficulty

    9. Trade-marks

    Names Logos Product packaging Shape of product Earned by use Registration gives Canadian rights

    10. Trade-marks

    Key: distinctiveness Must link products or services to a unique source

    11. Copyright

    Protects “works” books movies music artwork computer programs Protects “expression”, not ideas Arises automatically, but can be registered

    12. Trade Secrets

    Recipes Formulae Customer lists “Know-how” Non-patentable inventions

    13. The Legal Cubby-holes

    Patents Trade-marks Copyright Industrial Designs Trade Secrets

    14. Overview of Basic Licensing

    Permission to do what you would not otherwise have the right to do

    15. Skeleton of a License Agreement

    The Big Question: WHO GETS WHAT?

    16. Skeleton of a License Agreement

    Three building blocks License Skeleton Who: The Parties Gets: The Grant What: The Definitions Licensor Licensee Definitions The Grant

    17. IP License Agreement - WHO

    Who has the right to grant the license? Ownership of the intellectual property? Licensed to sublicense the intellectual property? Do I have a warranty that says so?

    18. IP License Agreement - WHO

    Who is the Licensee? The company? >> 1 machine, 1 location >> site license >> corporate wide Subsidiaries and affiliates?

    19. IP License Agreements - WHAT

    WHAT DOES THE LICENSEE GET? What IP rights are being granted? copyright, trade secrets, patents, know-how if trade secrets, include confidentiality provisions

    20. IP License Agreements - WHAT

    WHAT DOES THE LICENSOR GET? $$$$ License fees Royalties Cross-licenses

    21. License Grant

    The Legal Cubby-hole What it Protects Patents Function or Composition Trademarks Brand Names and Logos Copyright The Form of Information Trade Secrets / The Secrecy of an idea Confidential Info

    22. License Grant

    Licensor hereby grants to Licensee a nontransferable, nonexclusive right and license to use the Licensed Patents In the Territory, solely for the purpose of manufacturing and selling the Licensed Products License Skeleton Licensor Licensee Definitions The Grant

    23. License Grant

    What is the Licensee allowed to do? Patents: make, use, sell Trade-marks: use Copyright: copy, publish, translate, perform, modify, create derivative works Trade Secrets: use

    24. License Grant

    What is the Licensee allowed to do? Exclusive: only the Licensee Sole: only the Licensee and the Licensor Non-exclusive: multiple Licensees

    25. License Grant

    What is the Licensee allowed to do? Territory: “use the Licensed Trade-marks to promote, sell and distribute products in Canada and the United States Field: use the Licensed Patents to develop a therapeutic product to treat diabetes Sublicense: modify the source code of the Licensed Software to create the Integrated Software and sublicense the object code of the Integrated Software to end-users

    26. License Grant

    What is the Licensee not allowed to do? non-competition no reverse engineering no misuse of confidential information sublicense use outside scope of grant Simon Says!

    27. License Grant

    Everything should be made as simple as possible, but no simpler

    28. License Grant

    “How many a dispute could have been deflated into a single paragraph if the disputants had dared to define their terms?” - Aristotle

    29. Consideration

    How much is the license worth? ˘˘˘ ---------------------------------------?$$$ Non-Exclusive -----------------------? Exclusive Small Territory -----------------? Large Territory Narrow Field -----------------------?Broad Field “Use” ----------------------------------? “Exploit” Technological ------------------? Technological Convenience Breakthrough

    30. Consideration

    License Fees (Fixed) Initial or Upfront Annual Milestone

    31. Consideration

    Royalties (Fixed or Variable) 5$ per widget sold 5% of “Revenue” per widget sold “Net Revenue” “Sales Revenue” “Profit” “Allocated Price”

    32. Consideration

    Minimum Royalty Commitment Tied to exclusivity Quotas per Territory, Product line or Total Maximum Royalties Payable Cap on Amount (aggregate of royalty payments) Cap on Time (duration of royalty payments) “Stacks” (total percentage of 3d party royalties) “Most Favoured Nation” “Substantially Similar”

    33. Consideration

    Reports May be tied to payment of royalties Periodic reports (monthly, quarterly, annual) Certified? use outside scope of grant Audits Should be conducted regularly

    34. Consideration

    Other Consideration Cross-license Shares/ Stock/ Equity Joint Venture arrangements

    35. Obligations - Licensor

    What does the Licensor have to do? Deliver the Intellectual Property Modify/Improve the Intellectual Property Enforce the Intellectual Property Defend against claims of Infringement

    36. Obligations - Licensor

    Deliver the Intellectual Property Disclose Know-How Train Licensee Personnel Support and Maintenance Disclose/Deliver Improvements and Modifications

    37. Obligations - Licensor

    Improvements – a development in the field of the licensed intellectual property that enhances one of the following: Usability Functionality Efficiency Performance

    38. Obligations - Licensor

    Improvements can be deemed included in license grant No additional payment required May extend life of payment terms License may be offered a right of first refusal Allows Licensor to negotiate additional $$$ Improvement may not be usable without base technology

    39. Obligations - Licensor

    Enforcement Prosecute and maintain registrations Take action against infringers Keep other licensees “in line” Defend against challenges to the validity of the intellectual property

    40. Obligations - Licensor

    Infringement Claims IP litigation can be VERY scary, VERY expensive and VERY risky Licensor may not want to bear the risk – will factor into overall value of license Other options: Replace Modify Settle or “Pay Tribute”

    41. Obligations - Licensee

    What does the Licensee have to do? “Work” the Invention Maintain Quality Standards Disclose and Deliver Improvements Indemnification/ Insurance Safeguard Confidential Information, Non-Compete, Non-Solicit

    42. Obligations - Licensee

    “Working” the Invention Tied to exclusivity May incorporate “quotas” Covenant to use “commercially reasonable” efforts to promote, distribute and sell products

    43. Obligations - Licensee

    Quality Standards Critical in trade-mark licenses Licensor entitled to inspect samples and audit Good practice to provide Licensee with specifications for mark use (e.g. dimensions, colours) and legends

    44. Obligations - Licensee

    Improvements These are “Licensee” improvements Licensor may require disclosure, and a license back Beware of “blocking” patents

    45. Obligations - Licensee

    Indemnification and Insurance Flip side to infringement indemnity Product liability concerns also VERY scary and VERY expensive Indemnity limited by Licensee’s activities (i.e., is the Licensee manufacturing?) In trade-mark licenses, product liability can be damaging to goodwill in owner’s mark

    46. Common Clauses

    Assignment Term and Termination Conflict Resolution

    47. Common Clauses

    Assignment Usually require consent to assign or in the event of a change of control May wish to withhold if assigned to a competitor Guarantee from original licensee?

    48. Common Clauses

    Term Term may be dependent on intellectual property rights

    49. The Terms

    50. Common Clauses

    Termination No matter how friendly the parties are, conflicts may arise – employees depart, market conditions change, etc. Better to plan ahead, while the parties are still on good terms

    51. Common Clauses

    Termination By Licensor: Failure of Licensee to pay royalties Breach of Confidential Information Failure to exploit By Licensee Invalidity of Patents Infringement Claim

    52. Key Aspects of IP License Agreements

    Donald M. Cameron The purpose of this document is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Ogilvy Renault or any member of the Firm on the points of law discussed. © D. Cameron 2006 The Canadian Institute – Key Business Agreements Toronto, Ontario

More Related