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Contents

Published online by Cambridge University Press:  21 June 2022

Jorge L. Contreras
Jorge L. Contreras
Affiliation:
University of Utah

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Type
Chapter
Information
Intellectual Property Licensing and Transactions
Theory and Practice
 , pp. v - xiv
Publisher: Cambridge University Press
Print publication year: 2022
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This content is Open Access and distributed under the terms of the Creative Commons Attribution licence CC-BY-NC-ND 4.0 https://creativecommons.org/cclicenses/

Contents

  1. List of Figures

  2. List of Tables

  3. Acknowledgments

  4. Introduction

    1. Why Study IP Transactions?

    2. Format of This Book

    3. Organization and Topics

    4. Limitations: What You Will Not Find in This Book

    5. Careful Drafting Pays

  5. Part IIntroduction to Intellectual Property Licensing

    1. 1The Business of Licensing

      1. 1.1The Licensing Industry

      2. 1.2Why License?

        1. 1.2.1Market Expansion (Divide and Conquer)

        2. 1.2.2Geographic Expansion

        3. 1.2.3Capacity Expansion

        4. 1.2.4Modularization

        5. 1.2.5Monetization: Direct

        6. 1.2.6Monetization: Indirect

        7. 1.2.7Rights Aggregation

        8. 1.2.8Platform Leadership

    2. 2Ownership and Assignment of Intellectual Property

      1. 2.1Assignments of Intellectual Property, Generally

      2. 2.2Assignment of Copyrights and the Work Made for Hire Doctrine

      3. 2.3Assignment of Patent Rights

      4. 2.4Trademark Assignments and Goodwill

      5. 2.5Assignment of Trade Secrets

      6. 2.6Joint Ownership

        1. 2.6.1Patents

        2. 2.6.2Copyrights

        3. 2.6.3Trade Secrets

        4. 2.6.4Trademarks

    3. 3The Nature of an Intellectual Property License

      1. 3.1License versus Ownership of IP

      2. 3.2Covenant Not to Sue

      3. 3.3The Governing Law of IP Licenses

        1. 3.3.1State Common Law of Contracts

        2. 3.3.2State Common Law of Property

        3. 3.3.3The Uniform Commercial Code

        4. 3.3.4Federal Common Law

      4. 3.4Obligation as Condition versus Covenant

      5. 3.5Effect of IP Transfer on Licenses

    4. 4Implied Licenses and Unwritten Transactions

      1. 4.1Statutes of Frauds

      2. 4.2Pitches and Idea Submissions

      3. 4.3Implied Licenses and Commissioned Works

      4. 4.4Implied Licenses in Law

    5. 5Confidentiality and Pre-license Negotiations

      1. 5.1Initial Overtures and Declaratory Judgments

      2. 5.2Confidentiality and Nondisclosure Agreements

      3. 5.3Preliminary Documents

  6. Part IILicense Building Blocks

    1. 6License Grant and Scope

      1. 6.1Licensed Rights

        1. 6.1.1Enumerated Rights

        2. 6.1.2Portfolio Rights

        3. 6.1.3The Puzzle of “Know-How” Licensing

        4. 6.1.4Product Rights

        5. 6.1.5Future Rights

      2. 6.2Scope of the License: Field of Use, Licensed Products, and Territory

        1. 6.2.1Field of Use

        2. 6.2.2Licensed Product

        3. 6.2.3Territory

      3. 6.3Grant Clause

      4. 6.4Changes to License Scope

      5. 6.5Sublicensing

    2. 7Exclusive Licenses

      1. 7.1Exclusivity: Rationales and Policy

      2. 7.2Licensor’s Obligations

        1. 7.2.1.Granting Other Licenses in the Exclusive Field

        2. 7.2.2Licensor’s Reserved Rights

        3. 7.2.3Licensor’s Duties with Respect to the Licensed IP

      3. 7.3Licensee’s Obligations: Duty to Exploit

        1. 7.3.1Milestone and Diligence Requirements

        2. 7.3.2Best Efforts

    3. 8Financial Terms

      1. 8.1Fixed Payments

        1. 8.1.1Up-Front and Lump-Sum Payments

        2. 8.1.2Option Fees

        3. 8.1.3Nonrefundable Fees

        4. 8.1.4Advances and Applicable Fees

      2. 8.2Running Royalties: The Royalty Rate

        1. 8.2.1Per-Unit Royalties

          1. 8.2.1.1Flat-Rate Royalties

          2. 8.2.1.2Tiered Royalty Schedules

        2. 8.2.2Percentage Royalties: The Royalty Rate

          1. 8.2.2.1The Basics

          2. 8.2.2.2Tiered Royalties

          3. 8.2.2.3Royalty Rate Levels

          4. 8.2.2.4Hybrid Royalty Rates

        3. 8.2.3Percentage Royalties: Royalty Base

          1. 8.2.3.1Net Sales

          2. 8.2.3.2Licensed Products

          3. 8.2.3.3Exclusions from Net Sales

      3. 8.3Running Royalties: Adjustments and Limitations

        1. 8.3.1Minimum Royalties

        2. 8.3.2Royalty Caps

        3. 8.3.3Royalty Buyouts

        4. 8.3.4Royalty Escalation Clauses

        5. 8.3.5Royalty Stacking and Bundling

          1. 8.3.5.1Royalty Stacking Clauses

          2. 8.3.5.2Royalties for Bundled Rights

      4. 8.4Sublicensing Income

      5. 8.5Milestone Payments

      6. 8.6Equity Compensation

      7. 8.7Cost Reimbursement

      8. 8.8Most-Favored Clauses

      9. 8.9Audit Clauses

    4. 9Development, Allocation and Management of IP

      1. 9.1Licensee Developments: Derivatives, Improvements and Grantbacks

        1. 9.1.1Derivative Works and Improvements

        2. 9.1.2Grantbacks

      2. 9.2Licensor Developments: Commissioned Works

        1. 9.2.1Allocation of IP for Commissioned Works

          1. 9.2.1.1Customizations

          2. 9.2.1.2Third-Party Components

          3. 9.2.1.3Customer Materials

        2. 9.2.2Technology Development Obligations

      3. 9.3Joint Developments: Foreground and Background IP

        1. 9.3.1Foreground and Background IP

        2. 9.3.2Joint and Reserved Fields

        3. 9.3.3Payments

      4. 9.4IP in Joint Ventures

        1. 9.4.1IP Contributions

        2. 9.4.2IP Allocations

        3. 9.4.3Exit

      5. 9.5IP Maintenance and Prosecution

        1. 9.5.1Responsibility for Prosecution and Maintenance

        2. 9.5.2IP Management

    5. 10Representations, Warranties and Indemnification

      1. 10.1Representations and Warranties

        1. 10.1.1Warranty of Title

        2. 10.1.2Corporate Warranties

        3. 10.1.3Performance Warranties

          1. 10.1.3.1Compliance with Specifications

          2. 10.1.3.2Reliable Performance

          3. 10.1.3.3Malicious Code

          4. 10.1.3.4Exclusions

          5. 10.1.3.5Service Warranties

          6. 10.1.3.6Duration

          7. 10.1.3.7Remedies

          8. 10.1.3.8Maintenance in Lieu of Warranty

      2. 10.2Disclaimers, Exclusions and Limitations of Liability

        1. 10.2.1Implied Warranty of Merchantability

        2. 10.2.2Implied Warranty of Fitness for a Particular Purpose

        3. 10.2.3Implied Warranty of Title and Noninfringement

        4. 10.2.4Course of Dealing

        5. 10.2.5Disclaiming Implied Warranties under the UCC

        6. 10.2.6Special Damages

        7. 10.2.7Exceptions to Exclusions

        8. 10.2.8How Much is Enough?

        9. 10.2.9Exceptions to the Cap

      3. 10.3Intellectual Property Indemnification

      4. 10.4Insurance

    6. 11Litigation-Related Clauses: Enforcement, Settlement and Dispute Resolution

      1. 11.1Licensee Standing and Joinder

        1. 11.1.1Copyright Licensee Standing

        2. 11.1.2Patent Licensee Standing

        3. 11.1.3Trademark Licensee Standing

        4. 11.1.4Trade Secret Licensee Standing

        5. 11.1.5Joinder

      2. 11.2Agreements to Enforce

      3. 11.3Contractual Choice of Law

        1. 11.3.1Jurisdictional Requirements for Domestic (US) Choice of Law

        2. 11.3.2International Choice of Law

        3. 11.3.3International Contractual Conventions

        4. 11.3.4Choice of Language

      4. 11.4Forum Selection Clauses

      5. 11.5Alternative Dispute Resolution

        1. 11.5.1Escalation

        2. 11.5.2Mediation

        3. 11.5.3Arbitration

          1. 11.5.3.1Speed

          2. 11.5.3.2Institutional versus Ad Hoc Arbitration

          3. 11.5.3.3Cost

          4. 11.5.3.4Case or Controversy

          5. 11.5.3.5Confidentiality

          6. 11.5.3.6Enforceability

      6. 11.6Fee Shifting

      7. 11.7Settlement License Agreements

        1. 11.7.1Dismissals

        2. 11.7.2Release and Covenant

        3. 11.7.3Licensed Rights

        4. 11.7.4No Admissions

        5. 11.7.5Warranty

        6. 11.7.6No Challenge

    7. 12Term, Termination and Breach

      1. 12.1Term of Agreement

        1. 12.1.1Beginning of the Term

        2. 12.1.2End of the Term: Expiration

        3. 12.1.3Renewals and Extensions

      2. 12.2Duration of Licenses

        1. 12.2.1Duration Coincident with Agreement Term

        2. 12.2.2Duration When an Agreement States No Term

        3. 12.2.3“Perpetual” and IP-Duration Licenses

      3. 12.3Breach and Termination for Cause

        1. 12.3.1Materiality

        2. 12.3.2Notice

        3. 12.3.3Cure

        4. 12.3.4Excuse of Performance: Dependencies

      4. 12.4Termination without Cause

      5. 12.5Effects of Termination and Survival

        1. 12.5.1Payments

        2. 12.5.2Return of Materials

        3. 12.5.3Transitional Licenses

        4. 12.5.4Transition Assistance

        5. 12.5.5Statutory Indemnities

        6. 12.5.6Effect on Sublicenses

        7. 12.5.7Termination of Less than the Full Agreement

        8. 12.5.8Sole Remedy

        9. 12.5.9Survival

    8. 13Other Licensing Terms: The “Boilerplate”

      1. 13.1Front Matter

        1. 13.1.1Title

        2. 13.1.2Parties

        3. 13.1.3Effective Date

        4. 13.1.4Recitals

        5. 13.1.5Acknowledgment of Consideration

      2. 13.2Definitions

      3. 13.3Assignment

        1. 13.3.1The Right to Assign, Generally

        2. 13.3.2The Right to Assign IP Licenses

        3. 13.3.3Assignment of Licenses in M&A Transactions

        4. 13.3.4Anti-Assignment Clauses

        5. 13.3.5Transfers of Rights

      4. 13.4Patent Marking

      5. 13.5Compliance with Laws

      6. 13.6Force Majeure

      7. 13.7Merger and Entire Agreement

      8. 13.8No Waiver

      9. 13.9Severability

      10. 13.10Order of Precedence and Amendment

      11. 13.11Mutual Negotiation

      12. 13.12Notices

      13. 13.13Interpretation

  7. Part IIIIndustry- and Context-Specific Licensing Topics

    1. 14Academic Technology Transfer

      1. 14.1Academic Research and the Bayh–Dole Act

        1. 14.1.1Ownership of Federally Funded Intellectual Property

        2. 14.1.2Royalty Sharing with Researchers

        3. 14.1.3Preference for United States Industry

      2. 14.2March-In Rights under the Bayh–Dole Act

      3. 14.3Licensing University Technology

        1. 14.3.1The Role of the TTO

        2. 14.3.2Nine Points for University Licensing

        3. 14.3.3University Reserved Rights

        4. 14.3.4Publication Rights

        5. 14.3.5Limiting Exclusivity

        6. 14.3.6Socially Responsible Licensing

        7. 14.3.7Price Controls

      4. 14.4Sponsored Research: Dollars and Options

      5. 14.5Material Transfer

      6. 14.6Universities and Copyright

    2. 15Trademark and Franchise Licensing

      1. 15.1Brand and Character Licensing

        1. 15.1.1Trade Dress

        2. 15.1.2Character Copyrights and Trademarks

        3. 15.1.3Design Patents

      2. 15.2Naked Trademark Licensing and Abandonment

      3. 15.3Quality Control

        1. 15.3.1The Quality Control Requirement

        2. 15.3.2Contractual Quality Control Requirements

      4. 15.4Trademark Usage Guidelines: Trademarks, Certification Marks and Technical Standards

      5. 15.5Franchising

        1. 15.5.1The Business of Franchising

        2. 15.5.2The Franchise Agreement

    3. 16Music Licensing

      1. 16.1The Legal Structure of Music Copyright in the United States

      2. 16.2Licensing Musical Works and Compositions

        1. 16.2.1The “Mechanical” Reproduction Right

        2. 16.2.2The Compulsory License for Mechanical Reproductions under Section 115

        3. 16.2.3Public Performance Rights and Performing Rights Organizations (PROs)

      3. 16.3Licensing Sound Recordings

        1. 16.3.1Reproduction and Distribution Rights

        2. 16.3.2Public Performance Rights: Nondigital

        3. 16.3.3Public Performance Rights: Digital

          1. 16.3.3.1Interactive and Noninteractive Services

          2. 16.3.3.2The Statutory License for Noninteractive Services

          3. 16.3.3.3Privately Negotiated Licenses for Interactive Services

      4. 16.4Synchronization Rights

      5. 16.5Music Sampling

    4. 17Consumer and Online Licensing

      1. 17.1Shrinkwrap Licenses

      2. 17.2Clickwrap and Browsewrap Licenses

      3. 17.3The (D)evolution of Consumer Licenses

    5. 18Software, Data and the Cloud

      1. 18.1Data and Databases

        1. 18.1.1Protecting the Unprotectable

        2. 18.1.2Licensing Data

          1. 18.1.2.1Trade Secrets

          2. 18.1.2.2Data Licensing as a Contractual Matter

        3. 18.1.3Noncircumvention and Noncompetition in Data Licensing

        4. 18.1.4Data Privacy

      2. 18.2Proprietary Software Licensing

        1. 18.2.1Source Code and Object Code

        2. 18.2.2Legal Protection of Software

          1. 18.2.2.1Copyright

          2. 18.2.2.2Patents

          3. 18.2.2.3Trade Secrets

        3. 18.2.3Software Licensing

          1. 18.2.3.1Software Use Licenses

          2. 18.2.3.2Software Distribution Agreements

          3. 18.2.3.3Proprietary Source Code Licenses

        4. 18.2.4Maintenance, Support, Updates and Upgrades

        5. 18.2.5Reverse Engineering Restrictions

      3. 18.3Licensing in the Cloud

    6. 19Public Licenses: Open Source, Creative Commons and IP Pledges

      1. 19.1Creative Commons and Open Content Licensing

      2. 19.2The Open Source Phenomenon

        1. 19.2.1Origins: The Free Software Movement

        2. 19.2.2Defining Open Source Software

        3. 19.2.3The BSD Licenses

        4. 19.2.4The GNU General Public License

          1. 19.2.4.1Access to Source Code

          2. 19.2.4.2Copyleft: The “Viral” Nature of GPL

          3. 19.2.4.3Anti-Anti-Circumvention

          4. 19.2.4.4Anti-Tivoization

          5. 19.2.4.5Patentleft

        5. 19.2.5Enforcement of OSS Licenses

      3. 19.3Open Source in the Commercial Market

        1. 19.3.1Open Source as a Business Model

        2. 19.3.2Integrating OSS with Commercial Products

          1. 19.3.2.1Considerations for Using OSS in a Corporate Enterprise

          2. 19.3.2.2Considerations for Incorporating OSS into a Distributed Product

          3. 19.3.2.3Required Notices and Licensing Terms

        3. 19.3.3OSS Due Diligence

      4. 19.4Patent Pledges

    7. 20Technical Standards: Fair, Reasonable and Nondiscriminatory (FRAND) Licensing

      1. 20.1Standards, Standardization and Patents

        1. 20.1.1The SDO Ecosystem

        2. 20.1.2Patents and Standards

        3. 20.1.3SDO IP Policies

        4. 20.1.4The Challenge of Defining FRAND Royalty Rates

      2. 20.2Patent Disclosure Policies

      3. 20.3FRAND Royalty Rates

        1. 20.3.1FRAND Royalties in the United States and the Georgia-Pacific Framework

        2. 20.3.2Bottom-Up versus Top-Down Royalty Determinations

      4. 20.4Nondiscrimination and FRAND Commitments

        1. 20.4.1Hard-Edged Nondiscrimination

        2. 20.4.2Level Discrimination

      5. 20.5Effect of a FRAND Commitment on Injunctive Relief

      6. 20.6The Transfer of FRAND Commitments

  8. Part IVAdvanced Licensing Topics

    1. 21Bankruptcy and Insolvency Issues

      1. 21.1Automatic Stay of Proceedings

      2. 21.2The Bankruptcy Estate

      3. 21.3Executory Contracts and Section 365(n)

      4. 21.4Assignment by Bankrupt Licensee

      5. 21.5Ipso Facto Clauses

      6. 21.6Bankruptcy and Escrow

    2. 22Estoppel and No-Challenge Clauses

      1. 22.1Assignor Estoppel

      2. 22.2Licensee Estoppel

      3. 22.3Validity Challenges under the Declaratory Judgment Act

      4. 22.4No-Challenge Clauses

        1. 22.4.1Agreements Not to Challenge

        2. 22.4.2No-Challenge Clauses in Copyright and Trademark Licenses

        3. 22.4.3Other Penalties for Validity Challenges

    3. 23First Sale and Exhaustion

      1. 23.1Copyright First Sale

      2. 23.2Software Sale versus License

      3. 23.3Trademark Exhaustion and First Sale

      4. 23.4Patent Exhaustion

      5. 23.5Conditional Sales and Post-Sale Restrictions

      6. 23.6International First Sale, Exhaustion and Gray Markets

        1. 23.6.1International First Sale and Copyrights

        2. 23.6.2International Patent Exhaustion

        3. 23.6.3International Trademark Exhaustion and the Gray Market

    4. 24Intellectual Property Misuse

      1. 24.1The Origins of the Misuse Doctrine

      2. 24.2Misuse by Scope Expansion: Tying and Statutory Reform

      3. 24.3Misuse by Term Expansion: Post-Expiration Royalties

        1. 24.3.1The Long Shadow of Brulotte

        2. 24.3.2The Limits of Brulotte: Aronson v. Quick Point and Unpatented Articles

      4. 24.4Misuse by Bundling: Package Licensing

      5. 24.5Noncompetition and Copyright Misuse

    5. 25Antitrust and Competition Issues

      1. 25.1Per Se Illegality versus the Rule of Reason

      2. 25.2Price Fixing

      3. 25.3Market Allocation

      4. 25.4Vertical Restraints: Resale Price Maintenance

      5. 25.5Unilateral Conduct: Tying

      6. 25.6Monopolization and Market Power

      7. 25.7Refusals to Deal: Unilateral and Concerted

      8. 25.8Antitrust Issues and Due Process in Standard Setting

      9. 25.9Reverse Payment Settlements: “Pay for Delay”

    6. 26Intellectual Property Pools and Aggregation

      1. 26.1Theories of IP Pooling: Efficiency and Enablement

      2. 26.2Antitrust Analysis of Patent Pools

      3. 26.3Patent Pools for Standards

      4. 26.4Complementarity and Essentiality in Patent Pools

  9. Index

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  • Contents
  • Jorge L. Contreras, University of Utah
  • Book: Intellectual Property Licensing and Transactions
  • Online publication: 21 June 2022
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  • Contents
  • Jorge L. Contreras, University of Utah
  • Book: Intellectual Property Licensing and Transactions
  • Online publication: 21 June 2022
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  • Contents
  • Jorge L. Contreras, University of Utah
  • Book: Intellectual Property Licensing and Transactions
  • Online publication: 21 June 2022
Available formats
×