Published on March 5, 2014
DOMESTIC AND INTERNATIONAL LICENSING Cliff Potter Northbrook, IL +1-847-532-9337
Domestic and International Licensing 2 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. RCP - 130731
Domestic and International Licensing 3 LICENSING – SOME RIGHTS AND CLAIMS IN THIS PROGRAM RCP - 130731
Domestic and International Licensing BREADTH OF LICENSING – WHAT IS INVOLVED? Character and likeness Trademark and copyright From Littelfuse to Apple Look and feel and trade dress 4 From Sumitomo to Boeing Design patents and shapes From MacDonald’s® to USPS Patent and technology From the California Raisins® to Charlie Chaplin From Apple to Taco Cabana RCP - 130731
Domestic and International Licensing MARKETS AND PARTICIPANTS – WHAT IS INVOLVED? Types of markets Types of licenses Associations, developers and manufacturers Types of licensees 5 Licensing controls under antitrust and other laws Types of licensors Exclusive, non-exclusive, certification and collective Government involvement Geographic, product and technology markets Members, competitors, domestic and international RCP - 130731
Domestic and International Licensing 6 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. RCP - 130731
Domestic and International Licensing 7 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, royaltyfree, 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.” RCP - 130731
Domestic and International Licensing 8 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. RCP - 130731
Domestic and International Licensing 9 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? RCP - 130731
Domestic and International Licensing THE DECISION TO LICENSE – PRELIMINARY ANALYSES Relative strength of the right Relative strength of the owner In the industries involved In the broader market Compared with the licensee Compared with other competitors Cultural differences 10 To the business(es) involved To the owner Without owning other necessary rights International market differences RCP - 130731
Domestic and International Licensing 11 http://www.intipsa.com/wp-content/uploads/2012/06/INTIPSA_Tips_-_To_Sell_or_License_your_IP.pdf RCP - 130731
Domestic and International Licensing 12 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 RCP - 130731
Domestic and International Licensing IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS Royalties and Pricing Geographic Limitations “Fair” royalties under some circumstances Pricing licensed products and controls Compulsory licenses Country and smaller limitations Other considerations Exclusive and non-exclusive Does “exclusive” include licensor? Are non-exclusive mandatory? 13 Japanese and other guidelines RCP - 130731
Domestic and International Licensing 14 IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS Single or Multiple Licenses Product Markets and Other Uses For same licensee – termination issues for licensor and licensee For multiple licensees 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 RCP - 130731
Domestic and International Licensing 15 IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS Development of New and Related IP Planning for the Future Development work, including cross-licenses and other similar issues Is IP related? Is IP new or related? Improving the past New technologies for the future “Open” Innovation Model for Success Microsoft versus Apple, Intel versus Samsung RCP - 130731
Domestic and International Licensing IMPORTANT LICENSE TERMS AND RELATED CONSIDERATIONS Quality, Production and Other Controls Sales and Marketing Joint development and/or sharing Documentation of Activities and Other Information 16 Essential to retain trademark Business necessity Pricing Sales and monetization of licensed products and IP Information shared and developed RCP - 130731
Domestic and International Licensing 17 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 RCP - 130731
Domestic and International Licensing LICENSING MANAGEMENT – HOW CAN WE GET IT TOGETHER? Full-time Internal or External Licensing Group Rights Audits Rights Process Development and Maintenance Licensing-in preparation, identification, and confirmation 18 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 International program to license in for one-time project for government entity IP registration and maintenance systems RCP - 130731
Domestic and International Licensing LICENSING MANAGEMENT – DID WE GET IT TOGETHER? http://www.myce.com/news/music-licensing-a-nightmare-in-the-digital-world-33265/ 19 RCP - 130731
Domestic and International Licensing 20 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. RCP - 130731
Domestic and International Licensing 21 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 RCP - 130731
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