LAWCHEK®
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Personal Legal Sourcebooks
"LAWCHEK® Intellectual Property"
This is not a substitute for legal advice. An attorney must be consulted. "This
work is protected under the copyright laws of the United States. No
reproduction, use, or disclosure of this work shall be |
How is intellectual property licensed? |
Licenses
result from the transfer of a portion of the rights in a particular
intellectual property asset from one party to another.
The party who originally owned the intellectual property is
typically referred to as the licensor.
The party receiving the intellectual property rights is typically
identified as the licensee. Licenses
may arise in a variety of contexts and take many different forms.
One type of license is an express license, which results from an
actual agreement between the licensor and the licensee.
An express license is what is typically meant by the usage of the
term "license." Express
licenses may be in the form of an oral or a written agreement.
An
implied license arises from the objective manifestations of the parties.
Because terms of an implied license are not expressly agreed to,
courts typically find that any express license controls, and will only
find an implied license when no express license exists.
One particular type of implied license is a shop right.
An employer receives a shop right, which is a royalty-free,
non‑exclusive, and non‑assignable license, to intellectual
property created by an employee who used the employer's resources or
facilities. While
a particular form is not required to create an enforceable license, it
is desirable to organize the license in a logical manner to minimize
disputes relating to the scope of the license.
One of the preliminary aspects in preparing a license is to
select a title for the license. Next,
the license should identify and provide the address for each of the
parties involved in the licensing. The
license should set forth a description of the intellectual property
rights that are being licensed and the terms under which the rights are
being licensed. Identifying
the scope of the licensed intellectual property is particularly
important when less than all of the claims in a patent are being
licensed or when less than all of the "bundle of rights" in a
copyright are being licensed. When
licensing trademarks, the license must include provisions for the
licensor to monitor the quality of the licensee's use of the trademark. When
addressing the financial aspects of a license, the parties should
evaluate how the licensed intellectual property affects the value of
goods or services, such as making goods more appealing to consumers or
less expensive to manufacture. Compensation
may be in the form of a lump sum payment, periodic royalty payments, or
a combination thereof. One
factor affecting the most appropriate compensation plan is whether the
future value of the intellectual property is ascertainable. Another
provision that is frequently included in licenses is a most favored
licensee clause. Through
the most favored licensee clause, the licensee seeks to prevent the
licensor from granting other licenses on more favorable terms.
However, to exercise the most favored licensee clause, the
licensee must accept the subsequent license terms in their entirety. Example
forms for a written license of patent and trademark rights are attached
as part of this program. These
forms should only be the starting point for preparing the written
agreement, and should be particularized based on the unique requirements
of each of the parties. |
This is not a substitute for legal
advice. An
attorney must be consulted.
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