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Technology Licensing Agreements
Santa Clara University School of Law
Grandolfo, Gina M.

2009 Technology Licensing: Grandolfo

Introduction and Prelicensing

Prelicensing considerations

· Type of intellectual property and pedigree

· Client’s business model and results they want

· Client’s risk tolerance

Nondisclosure and Confidential Disclosure Agreements (NDAs and CDAs)

· Principles of NDAs

o Talking stage, before making deal

o Simple/discreet

· Mutual vs. one-way NDAs

o Usually mutual

NDA Structure

· Parties

· Effective date

· Purpose

· Confidential information

· Use/non-use

· Non-disclosure/disclosure

· Maintenance of confidentiality

· Term

· Termination

· No license/obligation

· Remedies

· Choice of law/venue

· Warranty/disclaimer

· No waiver

· Integration

· No export

· Severability

· Third party beneficiaries

Note: Number and title the paragraphs.

Parties/Effective Date

· Parties

o Signatories to the agreement

o Company and all affiliates and subsidiaries

o Want to know that they’re legit- incl state of inc, address, etc.

· Effective Date

o Can be different than signature dates

o Note- could come up as an issue if CI has already been disclosed, so may need to back-date

· This MUTUAL NONDISCLOSURE AGREEMENT is made and entered into as of ______ (“Effective Date”), between X, address, and Y, address.

Purpose

· Usually negotiate/explore business relationship/transaction

· Note- don’t go too far here. Keep it simple.

· “The parties wish to continue/explore a business opportunity of mutual interest and in connection with this opportunity, each party may disclose or have already disclosed to the other party certain confidential technical and business information which the disclosing party desires the receiving party to treat as confidential. Both X and Y can be a disclosing party or a receiving party of Confidential Information under this Agreement.”

Confidential Information

· Define confidential information and exceptions

o Can have marking requirement, but trend is away from it

o Put in technology underlying products

· Common things included:

o Software

o Non-public

o Trade secret

o Business technology

· List of things it can include:

o Printed or electronically recorded matter, business information, pricing and terms, related product documentation, technical data and information, algorithms, source code, performance statistics, benchmarking or other functional evaluations of products, future plans, product road maps, customer and employee information, know-how, trade secrets, background information;

o Information disclosed to disclosing party by third parties

· Example:

o “Confidential Information” means any information disclosed previously or in the future by either party to the other party, either directly or indirectly, in writing, orally or by inspection of tangible objects (including without limitation documents, prototypes, samples, plans, and equipment), which is designated as “confidential”, “proprietary” or some similar designation, or which, under all the circumstances should reasonably be treated as confidential.

· Exclusions

o Published information generally known on a non-confidential basis in the parties’ industry

o Becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party

o Corresponds in substance to that developed by the receiving party and is already in the possession of the receiving party prior to the time of disclosure by the disclosing party

o Corresponds in substance to information that is obtained by the receiving party from a third party without a breach of such third party’s obligations of confidentiality

o Is independently developed by the receiving party without use of or reference to the disclosing party’s CI

Use/non-use

· Use for purpose: Recipient shall have the right to make use of the Confidential Information solely for the Purpose. The receiving party agrees to use the Confidential Information only to the extent necessary for the purpose

· No reverse-engineering: Both parties agree not to reverse engineer, alter, decompile, disassemble, or otherwise modify any CI received or other tangible objects which embody the other party’s CI and which are provided to the party hereunder.

Non-disclosure/Disclosure

· Need to know: Each party agrees not to disclose any CI of the other party to third parties or to such party’s employees, except to those employees of the receiving party who are required to have the information in order to evaluate or engage in discussions concerning the contemplated use.

· Government/Court Order: If receiving party becomes legally obligated to disclose CI by law, court order, or other governmental order or request, receiving party will give disclosing party

o prompt written notice of such requirement prior to such disclosure,

§ Such notice must include

copyrights, trademarks, trade secrets, or other intellectual property rights.

o Nothing in this Agreement is intended to grant any rights, express or implied, to either party under any patent, mask work right, or copyright of the other party, nor shall this Agreement grant any party any rights in or to the CI of the other party or of any third party, except as expressly set forth herein.

· Not obligated to proceed with any transaction

· Nothing shall obligate either party to proceed with any transaction between them.

Remedies

· Cease disclosure as soon as possible

· Reserve monetary damages

· Injunction clause-

o want to have right to seek injunctive relief from court

o w/o requirement of proving damages or posting bond

· Example

o Each party acknowledges that a Recipient’s improper disclosure of Confidential Information will cause irreparable harm to the Discloser; and as such, the injured party is entitled to seek equitable relief to the extent permitted by law without the need to prove inadequacy of damages or the necessity of posting a bond, in addition to all other remedies.

Choice of law/venue

· Choice of law- what law going to govern

· Choice of venue- where can bring lawsuit

· Mediation/arbitration

· Note- can waiver right to jury trial, but usually don’t want to unless unattractive client

· Example

o This Agreement shall be governed by and construed in accordance with the laws of California, without regard to conflict of law principles. All actions arising there from shall be brought in the State of Califronia.

Warranty/disclaimer

· Each party warrants that it has the right to make disclosures made pursuant to the Agreement.

· Disclaimer- no warranties except those expressly provided

· Example:

o ALL CONFIDENTIAL INFORMATION IS PROVIDED “AS-IS”. EACH PARTY MAKES NO WARRANTIES, EXPRESS, IMPLIED OR OTHERWISE, REGARDING ITS ACCURACY, COMPLETENESS OR PERFORMANCE.

· Note- has to be bolded/caps; something to make it jump out of the text.