Cliff PotterNorthbrook, IL+1-847-532-9337

DOMESTIC AND INTERNATIONAL LICENSING

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LICENSING - WHAT WILL WE DISCUSS? The business of licensing, its breadth and other important factors for

the lawyer involved in domestic and international commerce. The effects of licensing on competition. The role of competition laws in domestic and international licensing. Legal issues faced when licensing various types of rights such as likeness

and trademark licenses around the world. Strategies for planning, review and development of clearly outlined

objectives for licensed products and technologies and avoiding common licensing mistakes.

License agreements and their possible provisions, terms and considerations from the standpoint of licensee and licensor.

Domestic and international licensing programs.

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LICENSING – SOME RIGHTS AND CLAIMS IN THIS PROGRAM

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BREADTH OF LICENSING – WHAT IS INVOLVED? Character and likeness

From the California Raisins® to Charlie Chaplin Trademark and copyright

From MacDonald’s® to USPS Patent and technology

From Sumitomo to Boeing Design patents and shapes

From Littelfuse to Apple Look and feel and trade dress

From Apple to Taco Cabana

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MARKETS AND PARTICIPANTS – WHAT IS INVOLVED? Types of markets

Geographic, product and technology markets Types of licenses

Exclusive, non-exclusive, certification and collective Government involvement

Licensing controls under antitrust and other laws Types of licensors

Associations, developers and manufacturers Types of licensees

Members, competitors, domestic and international

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THE APPLE LICENSING CONSIDERATIONS Graphical user interface (“GUI”) used by Apple was

derived from a Xerox GUI. Microsoft was also Xerox licensee.

Differences between major Apple executives over whether Apple should license its GUI to competitors.

Decision not to license broadly ultimately may have led to demise of Apple products and ascendency of Microsoft.

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THE APPLE – MICROSOFT LICENSE – A POIGNANT EXAMPLE Apple license

Graphical user interface (“GUI”) used by Apple licensed to Microsoft one week after Windows 1.0 released.

The license provided simply that “Apple hereby grants to Microsoft a non-exclusive, worldwide, royalty-free, perpetual, non-transferable license to use these derivative works in present and future software programs and to license them to and through third parties for use in their software programs.”

The “derivative works” under the license were from “the visual displays generated by Apple's Lisa and Macintosh graphic user interface programs.”

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THE APPLE – MICROSOFT LICENSE AGREEMENT LITIGATION Apple filed a lawsuit in 1988 contending that

Microsoft Windows programs used more than what was licensed and therefore violated Apple IP.

Apple’s claimed damages were $5.5 billion. The case established limits on what could be

licensed and what was or had to be considered unprotectable.

Apple had failed to establish any of its rights were violated and was sued by Xerox that claimed its GUI rights were infringed.

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PRACTICAL LESSONS FROM SHORT LICENSE AGREEMENTS General versus specific license agreements

The short of it – Lack of specificity can result in a failure to understand scope of agreement, especially in international agreements

The long of it – Lack of specificity can result in ambiguities that could be said to lack sufficient specificity to have led to any license at all.

Implied licenses Did Apple lose because of the intent of the parties? Can breadth of license be controlled by practical

considerations?

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THE DECISION TO LICENSE – PRELIMINARY ANALYSES Relative strength of the right

To the business(es) involved To the owner Without owning other necessary rights

Relative strength of the owner In the industries involved In the broader market Compared with the licensee Compared with other competitors

Cultural differences International market differences

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http://www.intipsa.com/wp-content/uploads/2012/06/INTIPSA_Tips_-_To_Sell_or_License_your_IP.pdf

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THE DECISION TO LICENSE – PRELIMINARY ANALYSES Examination of the Property Involved

Intellectual property and/or other rights Market penetration Competition Type(s) of products and their uses Ease of use Substitutes

Cultural differences International market differences Noren dai example

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IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS Royalties and Pricing

“Fair” royalties under some circumstances Pricing licensed products and controls Compulsory licenses

Geographic Limitations Country and smaller limitations Other considerations

Exclusive and non-exclusive Does “exclusive” include licensor? Are non-exclusive mandatory?

Japanese and other guidelines

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IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS Single or Multiple Licenses

For same licensee – termination issues for licensor and licensee

For multiple licensees Product Markets and Other Uses

Type(s) of products, excluding other types Recognition of Rights

Indonesia not member of Berne Convention China has had very tough IP laws, including the death

penalty in the past

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IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS Development of New and Related IP

Development work, including cross-licenses and other similar issues

Is IP related? Is IP new or related?

Planning for the Future Improving the past New technologies for the future

“Open” Innovation Model for Success Microsoft versus Apple, Intel versus Samsung

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IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS Quality, Production and Other Controls

Essential to retain trademark Business necessity

Sales and Marketing Joint development and/or sharing

Documentation of Activities and Other Information Pricing Sales and monetization of licensed products and IP Information shared and developed

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IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS Receptacles and Other Issues

The importance of shapes in product licensing The automotive industry

Efficiencies and the merger of products and supply lines Websites and Confusing Ownership Issues

IT business process patents Marketing process patents Outsourcing design and development

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LICENSING MANAGEMENT – HOW CAN WE GET IT TOGETHER? Full-time Internal or External Licensing Group Rights Audits

Typically called IP audits, expanded uses and issues requires broader rights audits to determine ownership of rights and avoid loss of revenue.

Internal and external Rights Process Development and Maintenance

Licensing-in preparation, identification, and confirmation International program to license in for one-time project for

government entity IP registration and maintenance systems

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LICENSING MANAGEMENT – DID WE GET IT TOGETHER?

http://www.myce.com/news/music-licensing-a-nightmare-in-the-digital-world-33265/

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IP, MORAL RIGHTS AND INTERNATIONAL PROTECTION Berne Convention, Article 6bis:

(1) Independently of the author's economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation.

(2) The rights granted to the author in accordance with the preceding paragraph shall, after his death, be maintained, at least until the expiry of the economic rights, and shall be exercisable by the persons or institutions authorized by the legislation of the country where protection is claimed. 

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LICENSING AND MORAL RIGHTS AND IP PROTECTION US and Great Britain largely reject moral rights

Tom Waits litigation in Spain and Germany were among lawsuits brought by US artists to enforce their moral rights

Recognized Waits has moral right in unique voice Moral Rights Exist In Europe and Elsewhere Even

After Artist’s Death Charlie Chaplin and Pablo Picasso

Have had separate licensing agencies for (1) moral rights owned by the person and family and (2) rights in the works of art themselves