Licensing Intellectual Property
In reference to rights of publicity, 14th and 5th amendments do not apply
Validity of the License – Southwest Airlines
Click wrap agreement
Shrink wrap agreement
Rule 2.1: Advisor. (Ohio PR)
In representing a client, a lawyer shall exercise independent professional judgment and render candid advice. In rendering advice, a lawyer may refer not only to law but to other considerations, such as moral, economic, social, and political factors, that may be relevant to the client’s situation.
Contract law is a state law – it isn’t governed by federal law
Exam – After Review of a Licensing Agreement – must be able to determine the following –
(1) – Whether a defaulting party has an obligation to cure every default or not.
(2) – Whether transfer of the weapons-related technology (or other technology) will implicate U.S. export control issues.
(3) – Whether it sufficiently protects Licensor’s trade secrets.
Principle Rights and Obligations: Maintenance of Secrecy:
a. restriction on use
b. agreement with employees
c. indemnification for breach
d. post-transaction: continued maintenance of the secret
(4) – Whether it requires Licensee to police Licensor’s trademarks.
(5) – Whether it requires both parties to use best efforts to negotiate in good faith with each other.
(6) – Whether it applies to only valid intellectual property.
(7) – Whether U.S. export control issues will arise during transfer of technical information between the two parties.
(8) – Whether U.S. export control issues will arise during transfer of technical information from one party to the other.
(9) – Whether the territorial scope of the agreement is sufficiently definite.
(10) – Whether the subject matter of it is sufficiently definite.
(11) – Given the background, whether the parties to the agreement are properly designated.
(12) – Whether the parties are required to provide a royalty report under this agreement.
(13) – Whether the obligations and rights of both parties are sufficiently definite.
(14) – Whether obligation to maintain secrecy extends beyond the effective period of this agreement.
(15) – Whether a party has right under this agreement.
(16) – Whether the Licensee, by itself, has standing to enforce Licensor’s Intellectual Property against third parties.
(17) – Whether the effective period of the agreement is sufficiently definite.
(18) – Whether the breadth of the agreement raises anti-trust issues that relate to tying arrangements.
(19) – Whether the amount of royalties that will be due to the Licensor under this agreement are sufficiently clear.
(20) – Whether the agreement requires arbitration as the first step in resolving any dispute arising under the agreement between the parties.
(21) – Whether none of the IP that has been developed under government contracts may be licensed to one of the parties.
(22) – Whether the Licensor only has rights to grant a license on IP that Licensor owns.
(23) – Whether Licensor may have a right to terminate one or more copyright licenses that are granted under the agreement, even when there is no material breach or default of the agreement by Licensee.
(24) – Whether Licensee’s obligation to reasonably protect Licensor’s IP triggers a duty by Licensee to use Licensor’s trademarks.
(25) – Whether insofar as Licensor is a U.S. company and the agreement is in English, the U.S. law will govern the substantive provisions of the agreement.
(26) – If Licensee brings an action against Licensor for infringement o
oods or services will be deemed to constitute assent. In order to be enforceable, there must be a conspicuous notice of the existence of the terms of the agreement, and there must be a clear manifestation of the user’s assent to those terms.
– Register v. Verio
– Southwest v. Boardfirst
– “Bottom Line” Steps to Enforceable Online Agreements –
1. User must have adequate notice that proposed terms exist
2. User must have meaningful opportunity to review the terms
3. User must have adequate notice that taking a specified, optional action manifests assent to the terms
4. User must, in fact, take that action
– Relevant Statutes and Regulations –
– Uniform Electronic Transactions Act (“UETA”)
– Ohio Revised Code § 1306.01 (“Ohio Uniform Electronic Transactions Act”)
▪ A contract may be formed by the interaction of an electronic agent and an individual, acting on the individual’s own behalf or for another person, including by an interaction in which the individual performs actions that the individual is free to refuse to perform and that the individual know or has reason to know will case the electronic agent to complete the transaction or performance. See Ohio UETA 1306.13(B)
– Example “Browse-wrap” Agreement –
– Commercial Realities –
– Courts will take into account commercial realities of how contracts are formed when considering shrink-wrap agreements, click-wrap agreements, etc.
– “Actual” or “Constructive” Knowledge –
– In order for a license agreement to be valid, the licensee must have actual or constructive knowledge of the terms prior to use of the license.
Patent Licensing –
– Patent Misuse
– Patent Exhaustion
General Licensing Provisions –
– Preamble –
– License Type
– License Grant –
– Subject Matter
– Reservation of Rights (or Restrictions)
– Sublicensing –
§ Sublicense and Royalty Sharing
1. Licensee gives someone a license
a. Exhaustion: Authorized sale within agreement-product, 1st product rule
b. Sublicense: Conditional sale, only what is given through sublicense agreement
c. Can only grant what THEY have-downstream right
d. Licensor still gets royalties
– Royalties –
– Royalty Report
– Royalty Payment
– Audits and Accounting