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Practising Law Institute1177 Avenue of the Americas

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Advanced Licensing Agreements 2017

Volume One

INTELLECTUAL PROPERTYCourse Handbook Series

Number G-1307

Co-ChairsMarcelo Halpern

Ira Jay LevyJoseph Yang


2

Avoiding Common Mistakes in Patent and Technology Licensing (PowerPoint slides)

Joseph Yang

PatentEsque Law Group, LLP

© 2017 PatentEsque Law Group, LLP. Unauthorized reproduction prohibited.

If you find this article helpful, you can learn more about the subject by going to www.pli.edu to view the on demand program or segment for which it was written.

1-113


1-114


AVO

IDIN

G C

OM

MO

N M

ISTA

KES

IN

PATE

NT

AN

D T

ECH

NO

LOG

Y LI

CEN

SIN

G

Jose

ph Y

ang,

Esq

.Pa

tent

Esqu

e La

w G

roup

, LLP

Los

Alto

s an

d M

enlo

Par

k, C

alifo

rnia

joe@

pate

ntes

que.

com

PA

TE

NT

ES

QU

E L

AW

GR

OU

P,

LL

P

Prac

tisin

g La

w In

stitu

teA

dvan

ced

Lice

nsin

g A

gree

men

ts 2

017

San

Fran

cisc

o (J

an. 2

4-25

, 201

7)N

ew Y

ork

City

(Mar

. 6-7

, 201

7)C

hica

go (M

ay 1

1-12

, 201

7)

1-115


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

repr

oduc

tion

proh

ibite

d.2

AVO

IDIN

G C

OM

MO

N M

ISTA

KES

IN

PATE

NT

& T

ECH

NO

LOG

Y LI

CEN

SIN

G

1.Jo

int O

wne

rshi

p (U

sual

ly B

ad!)

2.Te

chno

logy

vs.

Inte

llect

ual P

rope

rty

(The

y’re

Not

the

Sam

e!)

3.A

Prom

ise

to G

rant

is N

ot a

Gra

nt (W

hen

You

Don

’t O

wn

Wha

t You

Pa

id F

or!)

4.D

iffer

ent T

ypes

of I

P G

rant

s (O

wne

rshi

p v.

Lic

ense

v. C

oven

ant N

ot

to S

ue)

5.En

forc

emen

t Rig

hts

vs. G

rant

Typ

e (T

hey’

re N

ot A

rbitr

ary

or

Inde

pend

ent!)

6.C

hang

e of

Con

trol

(Pla

n A

head

!)7.

Rep

s, W

arra

ntie

s &

Inde

mni

ficat

ion

(It’s

Not

Jus

t Boi

lerp

late

!)8.

Uni

nten

ded

Gra

nts

& C

onse

quen

ces

9.R

oyal

ty P

rovi

sion

s10

.N

egot

iatio

ns

1-116


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

3

CO

MM

ON

MIS

TAK

E #

1 –

JOIN

T O

WN

ERSH

IP

[TO

BE

DIS

CU

SSED

IN S

EPA

RAT

E TA

LK T

OM

OR

RO

W]

1-117


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

4

CO

MM

ON

MIS

TAK

E #

2 –

TEC

HN

OLO

GY

VS. I

NTE

LLEC

TUA

L PR

OPE

RTY

A.

Tech

nolo

gy

1.Ta

ngib

les

and

Inta

ngib

les

= Th

ings

a.P

roce

sses

, tec

hniq

ues,

kno

w-h

ow,

algo

rithm

s, s

oftw

are,

con

tent

, dat

a,

data

base

s, p

roto

cols

, man

ufac

turin

g pr

oces

ses,

bus

ines

s or

lega

l pla

ns, e

tc.

B.

Inte

llect

ual P

rope

rty =

Leg

al R

ight

s

1.P

aten

ts, c

opyr

ight

s, tr

ade

secr

ets,

and

trad

emar

ks

2.R

egis

tratio

ns o

f, ap

plic

atio

ns to

app

ly fo

r, an

d pr

iorit

y rig

hts

base

d on

, the

fore

goin

g

I.TH

EY

’RE

NO

T TH

E S

AM

E!

1-118


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

5

C.

Pro

blem

s w

ith C

omm

ingl

ing

Tech

nolo

gy +

IP:

Exa

mpl

e

1.D

efin

e “T

echn

olog

y” =

del

iver

able

s +

pate

nts

2.G

rant

lice

nse

to p

ract

ice

Tech

nolo

gya.

Lice

nse

to p

ract

ice

pate

nts

inde

pend

ent o

f the

del

iver

able

s

3.G

ive

noni

nfrin

gem

ent g

uara

ntee

for

Tech

nolo

gya.

Pro

tect

s lic

ense

e’s

own

impl

emen

tatio

ns u

nrel

ated

to th

e de

liver

able

s

1-119


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

6

D.

Tech

nolo

gy G

rant

v. I

P G

rant

?

1.P

ure

Tech

nolo

gy G

rant

-app

ropr

iate

for f

inis

hed

prod

uct (

e.g.

, I li

cens

e yo

u to

ope

rate

my

car)

2.P

ure

IP G

rant

-app

ropr

iate

if n

o te

chno

logy

tran

sfer

(e

.g.,

I lic

ense

you

to m

ake

and

sell

prod

ucts

and

pr

oces

ses

cove

red

by U

.S. p

aten

t no

x,xx

x,xx

x)

3.E

very

thin

g E

lse

-Be

very

spe

cific

:

a.Tr

ansf

erab

ility

(per

sona

l v. t

rans

fera

ble)

;

b.O

wne

rshi

p/ex

clus

ivity

(ass

ignm

ent;

excl

usiv

e v.

non

excl

usiv

e lic

ense

);

c.IP

type

(e.g

., pa

tent

, cop

yrig

ht, t

rade

sec

ret,

etc.

);

a.C

arrie

s an

impl

ied

licen

se to

use

all

nece

ssar

y IP

of t

he li

cens

or

1-120


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

7

d.R

ight

to E

xplo

it

i. P

aten

t: m

ake,

use

, sel

l, of

fer f

or s

ale,

im

port

e.Te

chno

logy

;

f.Li

cens

ed F

ield

;

g.Te

rrito

ry; a

nd

h.Li

cens

e Te

rm(m

ay n

ot b

e sa

me

as te

rm o

f A

gree

men

t).

4.E

xam

ple:

I g

rant

you

a p

erso

nal n

onex

clus

ive

licen

se

unde

r U.S

. pat

ent 7

,654

,321

to m

ake

and

use

wid

gets

in

the

auto

mob

ile in

dust

ry in

the

U.S

. unt

il 12

/31/

15.

ii.

Cop

yrig

ht: c

opy,

dis

tribu

te, d

ispl

ay,

perfo

rm, c

reat

e de

rivat

ive

wor

ks, e

tc.

iii.

Trad

e S

ecre

t : u

se a

nd/o

r ad

hoc

iv.Tr

adem

ark :

use

and

/or a

d ho

c

1-121


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

8

CO

MM

ON

MIS

TAK

E #

3 –

A PR

OM

ISE

TO G

RA

NT

IS N

OT

A G

RA

NT

A.

Agr

eem

ent t

o as

sign

is n

otan

ass

ignm

ent!

(e.g

., “I

will

assi

gn”;

“You

sha

ll ow

n”; “

I agr

ee to

ass

ign”

)

1.M

erel

y a

prom

ise

2.D

oes

not c

onve

y tit

le.

IPVe

ntur

e v.

Pro

star

,503

F.3

d 13

24

(Fed

. Cir.

200

7) (E

mpl

oyee

IP a

ssig

nmen

t agr

eem

ent

cont

aine

d m

ere

agre

emen

t to

assi

gn, n

otac

tual

as

sign

men

t). S

ee a

lso

Sta

nfor

d v.

Roc

he, 5

83 F

.3d

832

(Fed

. Cir.

200

9)

3.S

epar

ate

trans

actio

n w

ill be

requ

ired

to c

onve

y tit

le.

4.N

ot e

nfor

ceab

le a

gain

st b

ona

fide

purc

hase

rs fo

r va

lue

(e.g

., su

bseq

uent

ass

igne

es).

Film

Tec

, 93

9 F.

2d 1

568

(Fed

. Cir.

199

1)

I.W

HE

N Y

OU

DO

N’T

OW

N W

HAT

YO

U P

AID

FO

R

1-122


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

9

1.Le

gal t

itle

auto

mat

ical

lytra

nsfe

rred

whe

n in

vent

ion

crea

ted

and

appl

icat

ion

filed

C.

Sam

e is

sues

aris

e fo

r fut

ure

licen

ses

D.

Dra

fting

tip:

Alw

ays

get a

pre

sent

gra

ntof

futu

re

right

s! (e

.g.,

“I he

reby

ass

ign/

gran

t…”)

B.

Pre

sent

ass

ignm

ent o

f fut

ure

pate

nts

does

con

vey

(equ

itabl

e) ti

tle.

Film

Tec,

939

F.2

d 15

68 (F

ed. C

ir.

1991

)

1-123


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

10

CO

MM

ON

MIS

TAK

E #

4 –

DIF

FER

ENT

IP G

RA

NT

TYPE

S

I.TY

PE

S O

F G

RA

NT

(US

ING

PAT

EN

T LA

W P

RE

CE

DE

NT)

A.

Labe

ls a

re n

ot d

eter

min

ativ

e

B.

Ass

ignm

ent

1.M

ust b

e in

writ

ing.

35

US

C 2

61.

1.C

ourts

will

cor

rect

inap

prop

riate

usa

ge

2.M

ay n

ot b

e w

hat p

artie

s in

tend

ed

2.Fo

rms:

a.Tr

ansf

er o

f “en

tire

right

, titl

e an

d in

tere

st”

1-124


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

11

3.H

ow

a.Fo

rmal

tran

sfer

of t

itle

b.In

form

ally,

by

trans

fer o

f “al

l sub

stan

tial r

ight

s”

c.N

OT

clai

m-b

y-cl

aim

(pat

ent)

d.N

OT

by fi

eld

of u

se

Pop

e, 1

44 U

.S. 2

48 (1

892)

. A

lso

see

Intl.

G

amco

, 504

F.3

d 12

73 (F

ed. C

ir. 2

007)

and

Luce

nt v

. Gat

eway

, inf

ra.

b.U

ndiv

ided

par

t of f

oreg

oing

(e.g

.,jo

int o

wne

rshi

p)

Rite

-Hite

, 56

F.3d

153

8 (F

ed. C

ir. 1

995)

; Wat

erm

an,

138

U.S

. 252

(189

0).

1-125


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

12

i.Y

ES

, whe

n:

--Li

cens

or re

tain

ed ri

ght t

o ob

tain

fore

ign

pate

nts;

--Li

cens

or h

ad re

vers

iona

ry in

tere

st if

Lic

ense

e w

ent

bank

rupt

or s

topp

ed p

rodu

ctio

n;

--Li

cens

or h

ad ri

ght t

o re

ceiv

e in

fring

emen

t dam

ages

fro

m 3

Ps

(b/c

form

of c

onsi

dera

tion

for a

ssig

nmen

t);

--Li

cens

ee w

as g

rant

ed ri

ght t

o su

e w

/obl

igat

ion

to

info

rm L

icen

sor;

and

--Li

cens

ee c

ould

sub

licen

se o

nly

with

Lic

enso

r's

cons

ent [

STR

AN

GE

]

(Res

ult:

Pur

porte

d ex

clus

ive

licen

se re

ally

ass

ignm

ent)

Vaup

el, 9

44 F

.2d

870

(Fed

. Cir.

199

1)

1-126


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

13

ii.N

O, w

hen:

--G

rant

or re

tain

ed ri

ght t

o M

/U/S

for s

elf (

for s

elf a

nd

exis

ting

licen

sees

) [O

K];

--G

rant

was

sub

ject

to p

rior l

icen

ses

[OK

];

--G

rant

ee g

iven

righ

t to

sue,

but

gra

ntor

cou

ld s

ue if

gr

ante

e di

d no

t sue

[PR

OB

LEM

];

--G

rant

ee w

as o

blig

ated

not

to p

reju

dice

or i

mpa

ir pa

tent

righ

ts v

ia s

uit/s

ettle

men

t [P

RO

BLE

M];

--G

rant

or c

ould

par

ticip

ate

in s

uit b

y gr

ante

e

[CO

ULD

BE

PR

OB

LEM

]; an

d

--G

rant

ee c

ould

n't a

ssig

n, e

xcep

t to

succ

esso

r in

busi

ness

[PR

OB

LEM

].

(Res

ult:

Pur

porte

d as

sign

men

t rea

lly e

xclu

sive

lice

nse)

Abb

ott,

47 F

.3d

1128

(Fed

. Cir.

199

5)

1-127


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

14

iii.Fa

ctor

s co

urts

con

side

r:

--N

atur

e an

d sc

ope

of g

rant

or’s

v. g

rant

ee’s

righ

t to

sue

[ofte

n th

e m

ost i

mpo

rtant

fact

or]

--G

rant

ee’s

righ

t to

subl

icen

se

--R

ever

sion

of r

ight

s to

gra

ntor

upo

n br

each

--G

rant

or’s

righ

t to

porti

on o

f liti

gatio

n re

cove

ries

by

gran

tee

--D

urat

ion

of th

e gr

ant

--G

rant

or’s

abi

lity

to s

uper

vise

/con

trol g

rant

ee’s

ac

tiviti

es

--Li

mita

tions

on

gran

tee’

s ab

ility

to fu

rther

ass

ign

its

right

s

Man

n v.

Coc

hlea

r, __

_ F.

3d _

__ (F

ed. C

ir. 2

010)

1-128


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

15

C.

Exc

lusi

ve L

icen

se

1.M

ust h

ave

bene

ficia

l ow

ners

hip

of ri

ght t

o pr

even

t ot

hers

from

mak

ing/

usin

g/se

lling

. O

rtho,

52

F.3d

102

6 (F

ed. C

ir. 1

995)

.

a.P

aten

tee'

s ex

pres

s or

impl

ied

prom

ise

that

othe

rs s

hall

be e

xclu

ded

from

exp

loita

tion

with

in th

e ex

clus

ive

area

. R

ite-H

ite, 5

6 F.

3d

1538

(Fed

. Cir.

199

5); W

ater

man

, 138

U.S

. 25

2 (1

890)

2.W

ill ha

ve s

tand

ing

to s

uere

gard

less

of s

tand

ing

to

sue

clau

se.

Orth

o, s

upra

.

b.D

rafti

ng ti

p: M

ake

licen

sor e

xplic

itly

prom

ise

not t

o lic

ense

3P

3.D

efin

e ex

clus

ivity

by

field

of u

se /

time

/ geo

grap

hy

1-129


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

16

4.E

xclu

sive

eve

n as

to li

cens

or?

a.S

ilenc

e ca

n be

am

bigu

ous

(esp

ecia

lly o

vers

eas)

b.B

e ex

plic

it: “

w/ r

eser

v.” o

r “w

/o re

serv

.”

c.O

r bet

ter:

“… e

xclu

sive

(eve

n as

to li

cens

or) …

”

D.

Non

excl

usiv

e Li

cens

e

1.Fr

eedo

m fr

om s

uit

2.P

erso

nal t

o lic

ense

e (d

efau

lt=no

ntra

nsfe

rabl

e)

E.

Cov

enan

t Not

to S

ue

1.S

imila

r to

none

xclu

sive

lice

nse,

exc

ept

2.P

erso

nal f

rom

gra

ntor

(doe

s no

t run

with

IP

asse

t)

3.E

ncum

bran

ce o

n (r

uns

with

) IP

asse

t

1-130


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

17

CO

MM

ON

MIS

TAK

E #

5 –

ENFO

RC

EMEN

T R

IGH

TS V

S. G

RA

NT

TYPE

I.TH

EY

’RE

NO

T A

RB

ITR

AR

Y O

R IN

DE

PE

ND

EN

T!

A.

Deg

ree

of “s

tand

ing

to s

ue” f

ollo

ws

gran

t typ

e

B.

Gen

eral

ly (u

sing

pat

ent l

aw p

rece

dent

)

1.O

nly

by:

a.P

aten

tee.

35

US

C 2

81.

b.S

ucce

ssor

s in

title

. 35

US

C 1

00(d

).

c.E

xclu

sive

lice

nsee

s. O

rtho,

52

F.3d

102

6 (F

ed. C

ir. 1

995)

.

1-131


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

18

a.C

anno

t sue

for p

ast d

amag

es u

nles

s as

sign

or

also

exp

ress

ly c

onve

ys s

uch

right

. M

inco

, 95

F.3d

110

9 (F

ed. C

ir. 1

996)

.

i.“E

ntire

righ

t, tit

le &

inte

rest

” not

eno

ugh

b.N

unc

pro

tunc

(“now

for t

hen”

) agr

eem

ent m

ade

post

-sui

t, bu

t pur

porte

dly

effe

ctiv

e pr

e-su

it, is

in

effe

ctiv

e. G

AIA

, 93

F.3d

774

(Fed

. Cir.

199

6);

Abr

axis

Bio

scie

nce

v. N

avin

ta, 6

25 F

.3d

1359

(F

ed. C

ir. 2

010)

.

2.In

fring

emen

t sui

t = le

gal r

emed

y; p

lain

tiff m

ust h

old

lega

l titl

eat

tim

e of

infri

ngem

ent.

Ara

chni

d, 9

39 F

.2d

1574

(Fed

. Cir.

199

1).

c.D

rafti

ng ti

p: A

ssig

nee

shou

ld g

et “r

ight

to s

ue

for p

ast i

nfrin

gem

ents

(if a

ny)”

C.

Ass

igne

e (a

suc

cess

or in

title

)

1.C

an s

ue in

ow

n na

me

1-132


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

19

D.

Exc

lusi

ve L

icen

see

1.S

tand

ing

to s

ue

a.C

anno

t div

est t

rue

excl

usiv

e lic

ense

e of

righ

t to

sue

2.S

uit i

n pa

tent

ee's

nam

e (w

ith p

aten

tee)

3.M

ust j

oin

the

pate

ntee

Orth

o, 5

2 F.

3d 1

026

(Fed

. Cir.

199

5); A

rach

nid,

939

F.2

d 15

74

(Fed

. Cir.

199

1).

4.Li

mite

d E

xcep

tion:

A p

aten

t hol

ding

com

pany

sub

sidi

ary

was

form

ed a

nd a

ssig

ned

pate

nts

by th

e (o

rigin

al) p

aten

tee,

th

en e

xclu

sive

ly li

cens

ed p

aten

ts b

ack

to th

e pa

rent

. D

urin

g lit

igat

ion

(e.g

., a

DJ

defe

nse)

by

the

excl

usiv

e lic

ense

e,th

e ho

ldin

g co

mpa

ny w

as n

ot in

disp

ensa

ble ,

and

nee

d no

t be

join

ed, s

ince

its

inte

rest

s w

ere

fully

repr

esen

ted

by it

s pa

rent

.

Dai

nipp

on v

. CFM

T, 1

42 F

.3d

1266

, 126

9 (F

ed. C

ir. 1

998)

1-133


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

20

E.

Non

excl

usiv

e Li

cens

e

1.N

o st

andi

ng to

sue

a.D

rafti

ng ti

p : C

anno

t giv

e no

nexc

lusi

ve

licen

see

right

to s

ue

F.

Wat

ch fo

r Inc

onsi

sten

t Enf

orce

men

t Cla

uses

1.R

etai

ning

con

trol (

by a

ssig

nor)

2.In

hibi

ting

cont

rol (

by a

ssig

nee

or e

xclu

sive

lice

nsee

)

3.Im

prop

erly

gra

ntin

g co

ntro

l (to

non

excl

usiv

e lic

ense

)

4.C

ourt

will

rein

terp

ret g

rant

type

and

/or e

nfor

cem

ent

right

to b

e co

nsis

tent

with

eac

h ot

her!

1-134


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

21

II.JO

IND

ER

ISS

UE

S

A.

Nor

mal

ly re

quire

d of

all

parti

es h

avin

g st

andi

ng to

sue

(e.g

., ow

ners

and

exc

lusi

ve li

cens

ees)

E.

Dra

fting

tip

for l

icen

see:

Get

ow

ner t

o ag

ree

to jo

in s

uit,

and

also

to ju

risdi

ctio

n

C.

Do

larg

e co

mpa

nies

real

ly p

refe

r to

be in

volu

ntar

ily jo

ined

?

F.D

rafti

ng ti

p fo

r lic

enso

r: G

et e

xclu

sive

lice

nsee

to a

gree

to

join

sui

t, an

d al

so to

juris

dict

ion

B.

Are

the

nece

ssar

y pa

rties

bou

nd b

y a

cont

ract

ual c

oven

ant

to jo

in (e

.g.,

volu

ntar

ily)?

D.

Is in

volu

ntar

y jo

inde

r alw

ays

feas

ible

?

1.O

n th

e on

e ha

nd, r

ecen

t cas

e la

w (d

icta

) say

s ex

clus

ive

licen

sors

sta

nd in

a p

ositi

on o

f tru

st to

th

eir e

xclu

sive

lice

nsee

s, a

nd c

anno

t ref

use

invo

lunt

ary

join

der.

STV

.UN

M v

. Int

el(F

ed. C

ir. 2

014)

2.E

ven

so, t

here

are

per

sona

l jx.

Issu

es:

Rul

e 19

v.

Inde

pend

ent W

irele

ss (1

928)

.

1-135


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

22

CO

MM

ON

MIS

TAK

E #

6 –

CH

AN

GE

OF

CO

NTR

OL

I.P

LAN

FO

R M

ER

GE

RS

, AC

QU

ISIT

ION

S, E

TC.

A.

IP li

cens

es a

re b

y de

faul

t non

-tran

sfer

able

by th

e lic

ense

e

1.Fe

dera

l com

mon

law

2.C

ontra

st fr

ee a

liena

bilit

y of

non

-IP a

gree

men

ts

3.C

alifo

rnia

exc

eptio

n? S

uper

Bra

ce v

. Tid

wel

l, 20

04 W

L 26

6830

6 (C

al. A

pp.4

th20

04)

(pat

ent l

icen

se =

ass

igna

ble)

2.Fo

rwar

d S

ubsi

diar

y M

erge

r (ta

rget

into

acq

uiro

r sub

.) (a

ka F

orw

ard

Tria

ngul

ar M

erge

r)

3.A

sset

Sal

e

B.

Sile

nce

(or e

xpre

ss p

rohi

bitio

n on

tran

sfer

) will

bar t

rans

fer i

n si

tuat

ions

whe

re th

e or

igin

al li

cens

ee n

o lo

nger

hol

ds th

e co

ntra

ct

1.Fo

rwar

d M

erge

r (ta

rget

into

acq

uiro

r)

1-136


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

23

C.

Pro

hibi

tion

on tr

ansf

er (o

r sile

nce)

will

gen

eral

ly n

ot tr

igge

r an

ti-tra

nsfe

r cla

use

whe

re o

rigin

al li

cens

ee s

till h

olds

the

cont

ract

2.R

ever

se S

ubsi

diar

y M

erge

r (ak

a R

TM)

1.S

tock

Sal

e

a.

Mes

oSca

le v

. Roc

he(D

el. C

h. F

eb. 2

2, 2

013)

(RTM

do

es n

ot tr

igge

r ant

i-”as

sign

men

t” cl

ause

; fol

low

-on

to th

e co

urt’s

201

1 de

cisi

on in

the

sam

e ca

se

deny

ing

MTD

to s

tudy

if R

TM w

as a

ssig

nmen

t by

ope

ratio

n of

law

)

b.(?

) Exc

ept,

poss

ibly,

in C

alifo

rnia

. S

QL

Sol

utio

ns,

1991

WL

6264

58 (N

.D. C

al. 1

991)

(unr

epor

ted

case

) (tra

nsfe

r of p

aten

t or c

opyr

ight

lice

nse,

to a

co

mpe

titor

of l

icen

sor)

[pro

babl

y ba

d la

w]

1-137


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

repr

oduc

tion

proh

ibite

d.24

3.In

clud

e a

broa

d “d

eem

ed tr

ansf

er” c

laus

e (e

.g.,

any

oper

atio

n of

law

, mer

ger,

chan

ge o

f con

trol)

a.In

RTM

/sto

ck p

urch

ase,

targ

et c

ompa

ny w

ould

stil

l ho

ld a

gree

men

t any

way

(tra

nsfe

r or n

ot)

b.P

urpo

se is

to m

ake

acqu

isiti

on a

bre

ach,

giv

ing

non-

trans

ferr

ing

party

abi

lity

to te

rmin

ate

for b

reac

h

D.

Dra

fting

pro

hibi

tions

on

trans

fer

1.

“Lic

ense

e m

ay n

ot a

ssig

n an

y rig

ht o

r del

egat

e an

y ob

ligat

ion

unde

r, or

tran

sfer

in it

s en

tiret

y, th

is A

gree

men

t, to

any

3P

”

2.“a

nd a

ny s

uch

atte

mpt

ed a

ssig

nmen

t, de

lega

tion

or

trans

fer s

hall

be v

oid.

”

a.R

est.

2d C

ontra

cts

322(

2)(b

) –da

mag

es fo

r bre

ach,

bu

t ass

ignm

ent n

ot in

effe

ctiv

e

1-138


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

25

II.B

AN

KR

UP

TCY

A.

BA

SIC

CO

NC

EP

TS:

Ipso

fact

ocl

ause

une

nfor

ceab

le b

ecau

se

trust

ee/D

IP c

an re

ject

/ass

ume

any

exec

utor

y co

ntra

ct.

11 U

.S.C

. 363

(1),

365(

e)(1

), 36

5(f)(

1), 3

65(f)

(3) &

541

(c)(

1)(B

).

1.R

ejec

t ==>

aba

ndon

lice

nse

(usu

ally

aga

inst

wis

h of

lic

ense

e) to

incr

ease

val

ue o

f lic

ense

d IP

ass

et p

rior t

o sa

le (u

sual

ly w

here

lice

nsor

ban

krup

t)

2.A

ssum

e==

> ke

ep o

r ass

ign

(to o

ther

than

lic

ense

e) (u

sual

ly w

here

lice

nsee

ban

krup

t)

3.M

ost I

P lic

ense

s ar

e ex

ecut

ory

a.Li

cens

ee o

blig

atio

n to

mak

e re

ports

b.Li

cens

ee o

blig

atio

n to

mar

k an

d no

t to

sue

Lubr

izol

, 756

F.2

d 10

43 (4

thC

ir. 1

985)

; cer

t. de

nied

, 475

U.S

. 105

7 (1

986)

.

1-139


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

26

B.

EX

CE

PTI

ON

PR

OTE

CTI

NG

PAT

EN

T LI

CE

NS

OR

:

Trus

tee/

DIP

may

not

ass

ume

or [a

nd?]

ass

ign

whe

n no

n-ba

nkru

ptcy

law

exc

uses

acc

eptin

g an

othe

r's p

erfo

rman

ce. 1

1 U

SC

365

(c)

1.or

–“h

ypot

hetic

al te

st” –

3rd,

4th

, 5th

, 9th

, 11t

h ci

rcui

ts2.

and

–“a

ctua

l tes

t” –

1st c

ircui

t

3.Fe

dera

l IP

licen

ses

are

pers

onal

and

lice

nsor

nee

d no

t ac

cept

per

form

ance

from

oth

er th

an o

rigin

al li

cens

ee

(e.g

., fu

lly p

aid

up b

lank

et li

cens

e)

4.U

nles

s pa

rties

cle

arly

inte

nded

to a

llow

ass

ignm

ent

a.Li

cens

or s

houl

d dr

aft t

o em

phas

ize

pers

onal

b.Li

cens

ee s

houl

d dr

aft a

s as

sign

able

C.

EX

CE

PTI

ON

PR

OTE

CTI

NG

PAT

EN

T LI

CE

NS

EE

: If

trust

ee/D

IP re

ject

s, li

cens

ee h

as c

hoic

e of

:1.

Trea

ting

licen

se a

s te

rmin

ated

& s

eeki

ng re

med

y fo

r bre

ach;

or

2.E

lect

ing

to re

tain

righ

ts (I

P on

ly),

but m

ust c

ontin

ue to

pay

ro

yalti

es11

US

C 3

65(n

)

1-140


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

27

CO

MM

ON

MIS

TAK

E #

7 –

REP

RES

ENTA

TIO

NS,

WA

RR

AN

TIES

& IN

DEM

NIF

ICAT

ION

I.R

ISK

ALL

OC

ATIO

N M

EC

HA

NIS

M

A.

Bre

ach

of c

ontra

ct

1.R

epai

r

5.R

efun

d &

term

inat

e

3.M

odify

4.G

et li

cens

e

B.

Rem

edie

s

2.R

epla

ce

6.Li

quid

ated

dam

ages

(but

not

pen

alty

)

1-141


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

28

II.R

EP

S A

ND

WA

RR

AN

TIE

S

A.

[Tec

h. L

ic.]

Con

form

with

spe

cs (b

ewar

e co

mpu

ter a

nd fo

reig

n)

B.

[Tec

h./P

at. L

ic.]

Non

infri

ngem

ent (

pate

nts

–no

way

to k

now

)

C.

[Sal

e/P

at. L

ic.]

Valid

ity (p

aten

ts –

no w

ay to

kno

w)

1.S

uffic

ienc

y (n

onin

fring

emen

t in

disg

uise

)

D.

[Sal

e/E

xcl.

Pat

. Lic

.] N

o en

cum

bran

ces

(lice

nses

, sec

urity

inte

rest

s)

E.

[Sal

e/E

xcl.

Pat

. Lic

.] Ti

mel

y pr

osec

utio

n (a

band

onm

ent)

1-142


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

29

III.

Inde

mni

ficat

ion

A.

Som

etim

es ti

ed to

bre

ach

of R

&W

(2-s

tep)

B.

Ofte

n in

depe

nden

t pro

visi

ons

(1-s

tep)

1.N

ot a

bas

is fo

r exi

ting

the

agre

emen

t

IV.

Exc

lusi

ons

whe

re w

ould

not

hav

e oc

curr

ed b

ut fo

r:

A.

Use

out

side

sco

pe o

f lic

ense

B.

Mod

ifica

tion

of te

chno

logy

by

licen

see

C.

Com

bina

tion

with

sub

ject

mat

ter n

ot p

rovi

ded

by

licen

sor

D.

Use

with

sub

ject

mat

ter n

ot a

ppro

ved

by li

cens

or

E.

Use

of o

ther

then

late

st v

ersi

on (i

f ava

il.)

1-143


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

30

F.C

onsi

der e

xclu

ding

cer

tain

use

s

1.N

ucle

ar, a

ircra

ft (~

stri

ct li

abili

ty)

2.S

ervi

ce b

urea

u, o

utso

urci

ng (m

ultip

lier

effe

ct)

V.N

onin

fring

emen

t of 3

P IP

A.

Spe

cify

the

Ope

rativ

e D

ate

1.G

rant

or -

“as

of e

ffect

ive

date

”

2.G

rant

ee -

“doe

s no

t and

will

not”

B.

Be

war

y of

R&

W o

f pat

ent n

onin

fring

emen

t or

inde

mni

ficat

ion

agai

nst p

aten

t inf

ringe

men

t

1.P

aten

t = ri

ght t

o ex

clud

e, n

ot to

pra

ctic

e

2.N

ever

kno

w w

hat p

aten

ts a

re o

ut th

ere

1-144


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

31

3.G

rant

or -

Avoi

d gi

ving

a.G

et c

ap

b.Li

mit

via

know

ledg

e

i.R

eq'd

for p

aten

ts o

nly

ii.La

ck o

f lim

itatio

n us

ually

not

a

prob

lem

re T

S &

© b

ecau

se

inde

pend

ent d

evel

opm

ent i

s a

com

plet

e de

fens

e

1-145


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

32

II.E

STO

PP

EL

A.

Equ

itabl

e E

stop

pel

1.M

isle

adin

g co

nduc

tby

plai

ntiff

2.R

elia

nce

by d

efen

dant

3.M

ater

ial p

reju

dice

to d

efen

dant

Auk

erm

an, 9

60 F

.2d

1020

(Fed

. Cir.

199

2) (e

n ba

nc)

4.C

an h

appe

n in

ver

y sh

ort t

ime.

Asp

ex v

. Cla

riti,

605

F.3d

130

5(F

ed. C

ir. 2

010)

(agg

ress

ive

notic

e le

tters

follo

wed

by

3-ye

ar

sile

nce)

B.

Lega

l Est

oppe

l1.

Lice

nsor

gra

nts

licen

se; a

nd2.

Late

r trie

s to

inte

rfere

(e.g

., by

ass

ertin

g af

ter-

acqu

ired

pate

nt)

Spi

ndel

fabr

ik, 8

29 F

.2d

1075

(Fed

. Cir.

198

7),

Tran

scor

e v.

Ele

ctr.

Tran

s. C

ons.

,563

F.3

d 12

71 (F

ed. C

ir. 2

009)

(e

ven

with

sho

rt fo

rm d

iscl

aim

er o

f rig

hts

not e

xpre

ssly

gra

nted

)

CO

MM

ON

MIS

TAK

E #

8 –

UN

INTE

ND

ED G

RA

NTS

OR

CO

NSE

QU

ENC

ES

I.IM

PLI

ED

LIC

EN

SE

S

1-146


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

33

III.

IN R

EC

EN

T Y

EA

RS

, CO

UR

TS H

AVE

RE

PE

ATE

DLY

FO

UN

D N

EW

R

IGH

TS F

OR

LIC

EN

SE

ES

BE

YO

ND

TH

OS

E E

XP

RE

SS

LY G

RA

NTE

D

A.

Con

tinua

tion

Pat

ents

1.S

ubje

ct to

lega

l est

oppe

l, an

d al

so im

plie

dly

licen

sed,

ab

sent

a c

lear

inte

nt to

the

cont

rary

. G

ener

al P

rote

cht v

. Lev

iton,

___

F.3

d __

_ (F

ed. C

ir. 2

011)

B.

Rei

ssue

Pat

ents

1.“L

icen

sed

Pat

ents

” = A

ll pa

tent

s w

hich

lice

nsor

ow

ns, c

ontro

ls

or h

as ri

ght t

o lic

ense

on

effe

ctiv

e da

te o

r dur

ing

term

2.D

id n

ot m

entio

n re

issu

es o

f the

fore

goin

g3.

Rei

ssue

s is

sued

afte

r agr

eem

ent e

xpire

d w

ere

not i

nclu

ded

in

gran

t, bu

t “sh

ould

be

treat

ed” a

s su

ch b

ecau

se o

f par

ties’

“in

tent

”a.

Inte

nt w

as in

ferr

ed fr

om n

othi

ng m

ore

than

exi

sten

ce

of th

e pa

tent

reis

sue

stat

ute!

4.C

omm

ent :

How

can

par

ties’

inte

nt b

e sh

own

by s

tatu

te?

Inte

l v. N

egot

iate

d D

ata

Sol

utio

ns, 7

03 F

.3d

1360

(Fed

. Cir.

201

2)

1-147


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

34

C.

Hav

e M

ade

Rig

ht

1.G

rant

to m

ake,

use

and

sel

l inh

eren

tly in

clud

es ri

ght t

o

“hav

e m

ade”

2.A

cont

ract

ual d

iscl

aim

er o

f rig

hts

not e

xpre

ssly

gra

nted

do

es n

ot n

egat

e th

e ha

ve m

ade

right

with

out c

lear

/spe

cific

ev

iden

ce o

f an

inte

nt to

neg

ate

Cor

ebra

ce v

. Sta

r Sei

smic

, 566

F.3

d 10

69 (F

ed. C

ir. 2

009)

D.

Wip

ing

Out

“No

Cha

lleng

e” O

blig

atio

ns A

fter M

&A

1.P

arty

gav

e “n

o ch

alle

nge”

cov

enan

t as

part

of li

tigat

ion

settl

emen

t

2.Th

e co

vena

ntor

was

late

r acq

uire

d

3.Th

e co

vena

nt d

oes

not a

pply

to th

e pa

rt of

the

acqu

iror’s

bu

sine

ss n

ot a

risin

g fro

m th

e ac

quire

d co

mpa

ny, e

ven

whe

n th

e ac

quiro

r gen

eral

ly a

gree

d to

acc

ept a

ll of

the

oblig

atio

ns o

f the

acq

uire

d co

mpa

ny

4.C

omm

ent :

Thi

s ef

fect

ivel

y w

iped

out

the

cove

nant

Epi

star

v. I

TC a

nd P

hilip

s Lu

mile

ds, 5

66 F

.3d

1321

(Fed

. Cir.

200

9)

1-148


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

35

E.

Gra

nts

to U

nint

ende

d S

ubsi

diar

ies

1.Fa

cts:

“S

ubsi

diar

y” w

as d

efin

ed a

s in

clud

ing

any

entit

y th

at

the

licen

see

“now

or h

erea

fter”

con

trolle

d. T

he a

gree

men

t ha

d a

fixed

exp

iratio

n da

te, b

ut th

e pa

tent

lice

nses

sur

vive

d fo

r the

life

of t

he p

aten

t.

2.H

eld :

Sub

sidi

arie

s of

the

licen

see,

acq

uire

d af

ter t

he

expi

ratio

n da

te, w

ere

also

lice

nsed

.

Imat

ion

v. P

hilip

s, 5

86 F

.3d

980

(Fed

. Cir.

200

9)

F.Th

e re

cent

tren

dat

the

cour

ts is

cle

arly

ant

i-pat

ente

e(p

ro-li

cens

ee)

1.B

ut s

ee E

ndo

v. A

ctav

is(F

ed. C

ir. 2

014)

a.P

aten

tee

asse

rted

late

r (no

n-co

ntin

uatio

n) p

aten

ts

agai

nst a

lice

nsee

of t

he o

rigin

al p

aten

ts

b.A

gree

men

t had

a s

hort

form

dis

clai

mer

c.Fe

d. C

ir .:

“You

get

wha

t you

bar

gain

for.

And

we

will

not u

se th

e im

plie

d lic

ense

doc

trine

to in

sert

ours

elve

s in

to th

at b

arga

in a

nd re

writ

e th

e co

ntac

t”

d.C

omm

ent :

Thi

s ca

se b

ucks

the

rece

nt tr

end.

Is

the

mom

entu

m s

low

ing?

1-149


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

36

IV.

PATE

NT

EX

HA

US

TIO

N /

FIR

ST

SA

LE D

OC

TRIN

E

A.

Aut

horiz

ed (u

ncon

ditio

nal)

sale

of p

rodu

ct m

ade

unde

r pa

tent

lice

nse

exha

usts

the

pate

nt ri

ghts

aga

inst

do

wns

tream

use

rs

C.

If pr

oduc

t mad

e/so

ld u

nder

lice

nse

to p

aten

t A a

lso

“sub

stan

tially

em

bodi

es” p

aten

t B, t

hen

B e

xhau

sted

too

1.“s

ubst

antia

lly e

mbo

dies

” = p

ract

icin

g “e

ssen

tial

feat

ures

” of a

cla

im?

LG E

lect

roni

cs v

. Qua

nta,

553

U.S

. 617

(200

8)

B.

App

lies

to b

oth

devi

ce a

nd m

etho

d cl

aim

s

D.

Man

y op

en is

sues

rem

aine

d af

ter Q

uant

a

E.

Som

e ne

w la

w a

fter Q

uant

a1.

Unr

estri

cted

cov

enan

t not

to s

ue a

lso

exha

usts

.Tr

ansc

ore

v. E

lect

r. Tr

ans.

Con

s., 5

63 F

.3d

1271

(Fed

. Cir.

200

9)

1-150


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

37

2.E

xhau

stio

n =

defe

nse,

but

not

bas

is fo

r DJ.

Exc

elS

tor v

. Pap

st(F

ed. C

ir. 2

008)

3.Li

cens

ee’s

failu

re to

pay

roya

lties

doe

s no

t ret

roac

tivel

y co

nver

t an

auth

oriz

ed s

ale

into

an

unau

thor

ized

one

a.E

ven

whe

re th

e lic

ense

was

“sub

ject

to th

e te

rms

and

cond

ition

s” o

f the

con

tract

, and

an

othe

r pro

visi

on d

eem

ed to

be

unlic

ense

dpr

oduc

ts fo

r whi

ch ro

yalti

es w

ere

not p

aid.

Tess

era

v. IT

C, _

__ F

.3d

___

(Fed

. Cir.

201

1)b.

But

see

Jac

obse

n v.

Kat

zer,

535

F.3d

137

3(F

ed. C

ir. 2

008)

(ope

n so

urce

© li

cens

e co

ntin

gent

upo

n te

rms

and

cond

ition

s; b

reac

h le

d to

loss

of l

icen

se, a

nd ©

infri

ngem

ent s

uit)

1-151


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

38

4.P

aten

tee’

s sa

le o

f mac

hine

“sub

stan

tially

em

body

ing”

a m

etho

d cl

aim

exh

aust

sth

e pa

tent

ee’s

righ

ts a

gain

st u

naut

horiz

ed s

ales

of

(unp

aten

ted)

cop

ycat

con

sum

able

sus

ed in

the

mac

hine

/met

hod.

a.K

eurig

v. S

turm

, ___

F.3

d __

_ (F

ed. C

ir. 2

013)

i.

Met

hod

clai

m c

over

ed b

rew

ing

coffe

e by

po

king

inle

t/out

let h

oles

in a

cof

fee

cartr

idge

, ad

ding

wat

er, a

nd e

xtra

ctin

g co

ffee.

ii.

Hol

ding

: P

aten

tee’

s m

achi

ne s

ales

(cov

ered

by

devi

ce c

laim

s) e

xhau

sted

righ

ts v

. car

tridg

e se

llers

iii

.Fe

d. C

ir. c

hara

cter

ized

/dis

tingu

ishe

d Q

uant

aas

ap

plic

able

to e

xhau

stio

n by

sal

es o

f unp

aten

ted

com

pone

nts

(diff

eren

t sce

nario

)iv.

A co

nditi

onal

sal

ere

stric

ting

the

brew

er

purc

hase

r’s u

se c

ould

hav

e av

oide

d ex

haus

tion

v.

Pat

ent e

xhau

stio

n ap

plie

s to

pat

ents

in th

eir

entir

ety,

not

cla

im-b

y-cl

aim

1-152


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

39

b.Li

fesc

an v

. Sha

sta,

___

F.3

d __

_ (F

ed. C

ir. 2

013)

i.

Met

hod

clai

m c

over

ed im

prov

ed g

luco

se te

stin

g us

ing

a m

eter

com

parin

g bl

ood

mea

sure

men

ts

over

two

sens

ors

on a

dis

posa

ble

test

stri

p, a

nd

indi

catin

g an

err

or if

diff

eren

ce >

thre

shol

dii.

Fed.

Cir.

sta

ted

that

a s

old

prod

uct “

subs

tant

ially

embo

dies

” the

pat

ent i

f add

ition

al s

teps

need

ed to

co

mpl

ete

the

inve

ntio

n ar

e “ n

on-in

vent

ive”

aa.

Her

e, s

trip

clai

ms

had

been

reje

cted

due

to

prio

r art,

plu

s th

e sp

ec. &

pro

s. h

isto

ryem

phas

ized

inve

ntiv

enes

s of

the

met

erbb

.“[I

]f a

pate

nt h

ad a

ctua

lly is

sued

on

the

strip

s, th

e pa

tent

abilit

y of

the

strip

s co

uld

be re

leva

nt to

exh

aust

ion.

”iii

.H

oldi

ng:

If on

e ite

min

a p

aten

ted

com

bina

tion

is u

npat

ente

dan

d th

e in

vent

ive

conc

ept r

esid

es in

a

seco

nd it

em, t

hen

sellin

g th

e se

cond

item

exha

usts

a pa

tent

on

the

com

bina

tion.

1-153


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

40

iv.M

eter

s gi

ven

away

for f

ree

(or b

elow

cos

t) al

so

caus

e ex

haus

tion

aa.

Bec

ause

of t

he “a

utho

rized

and

un

cond

ition

al tr

ansf

er o

f titl

e ”bb

.A

labe

l not

ice

was

not

eno

ugh

to m

ake

the

sale

con

ditio

nal.

The

re s

houl

d be

an

“exp

ress

con

tract

ual u

nder

taki

ng.”

Citi

ng

Jazz

, 264

F.3

d 10

94 (F

ed. C

ir. 2

001)

cc.

“To

be s

ure,

the

amou

nt o

f com

pens

atio

nre

ceiv

ed b

y th

e pa

tent

ee m

ayin

som

e in

stan

ces

be re

leva

ntto

… w

heth

era

…

trans

actio

n is

… a

n un

cond

ition

al tr

ansf

eror

sal

e as

opp

osed

to a

con

ditio

nal s

ale

or li

cens

e.”

Citi

ng P

rinco

, 616

F.3

d 13

18,

1328

(Fed

. Cir.

201

0) (e

n ba

nc)

dd.

A pa

tent

ee’s

“tra

nsfe

r of t

he ri

ght t

o us

eth

e m

achi

nes

‘exh

aust

ed h

is ri

ghts

as

to

thos

e m

achi

nes’

” C

iting

Uni

vis,

316

U.S

. 24

1, 2

50 (1

942)

.

1-154


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

41

vi.

Wha

t abo

ut c

ontri

buto

ry in

fring

emen

tby

the

strip

se

ller?

aa.

“The

par

ties

have

not

arg

ued,

and

th

eref

ore

we

do n

ot d

ecid

e, w

heth

er th

ere

wou

ld b

e an

y im

pact

on

exha

ustio

n pr

inci

ples

if a

stri

p w

ere

‘esp

ecia

lly m

ade

or e

spec

ially

ada

pted

for u

se in

an

infri

ngem

ent o

f suc

h pa

tent

, and

not

a

stap

le a

rticl

e or

com

mod

ity o

f com

mer

ce

suita

ble

for s

ubst

antia

l ‘no

ninf

ringi

ng u

se’

with

in th

e m

eani

ng o

f 35

US

C 2

71(c

).”

5.“C

ondi

tiona

l sal

es” c

an b

e im

plem

ente

d by

pos

t-sal

e re

stric

tions

on

the

right

s gr

ante

d to

the

licen

see.

Lex

mar

k v.

Impr

essi

on P

rods

., __

_ F.

3d _

__ (2

016)

(en

banc

); ce

rt. g

rant

ed

1-155


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

42

F.P

ract

ice

Tips

–Av

oidi

ng E

xhau

stio

n1.

Use

a c

ondi

tiona

l sal

e st

ruct

ure

2.Li

cens

e, d

on’t

sell

3.If

licen

se to

mak

e/se

ll, re

quire

lice

nsee

’s c

usto

mer

be

lice

nsed

(els

e un

auth

oriz

ed s

ale)

4.Vo

id li

cens

e ab

initi

oif

exha

ustio

n is

foun

d5.

Sta

te “n

o ex

haus

tion”

= e

ssen

tial t

erm

of l

icen

se

criti

cal t

o m

eetin

g of

min

ds; b

asis

for r

esci

ssio

n if

not t

rue

6.G

rant

sta

ndst

ill in

stea

d of

lice

nse

or C

NTS

V.LA

CH

ES

A.

Pat

ente

e de

lays

filin

g su

it fo

r an

unre

ason

able

and

inex

cusa

ble

leng

th o

f tim

e af

ter i

t kne

w (o

r sho

uld

have

kno

wn)

of i

ts c

laim

ag

ains

t the

infri

nger

; and

B

.Th

e de

lay

prej

udic

esth

e in

fring

er1.

>6 y

ear d

elay

pre

sum

ed to

be

prej

udic

ial.

2.B

urde

n sh

ifts

to p

aten

tee

to s

how

del

ay w

as

reas

onab

le, o

r the

re w

as n

o pr

ejud

ice

1-156


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

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rized

re

prod

uctio

n pr

ohib

ited.

43

3.P

reju

dice

can

be

eith

er e

cono

mic

or e

vide

ntia

ry.

a.E

vide

ntia

ry P

reju

dice

:Lo

ss o

f rec

ords

, ev

iden

ce, e

tc. t

hat p

reve

nts

the

infri

nger

from

pro

ving

ano

ther

def

ense

sep

arat

efro

m la

ches

b.E

cono

mic

Pre

judi

ce:

Req

uire

s at

leas

t so

me

incr

ease

d ex

pend

iture

s in

relia

nce

on th

e de

lay

i.O

win

g da

mag

es fo

r a lo

nger

perio

dbe

caus

e of

the

dela

y is

not

econ

omic

pre

judi

ce

Hea

ring

Com

pone

nts

v. S

hure

, 600

F.3

d 13

57 (F

ed. C

ir. 2

010)

1-157


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

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rized

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uctio

n pr

ohib

ited.

44

VI.

GR

AN

TS T

O S

UB

SID

IAR

Y TH

RO

UG

H P

AR

EN

T

A.

Abs

ent a

pie

rcin

g of

the

corp

orat

e ve

il, a

par

ent c

ompa

ny is

not

lia

ble

for t

he a

cts

of it

s su

bsid

iary

B.

If lic

ense

agr

eem

ent w

ith p

aren

t als

o in

clud

es s

ubsi

diar

y, p

aren

t is

not l

iabl

e if

subs

idia

ry b

reac

hes

C.

Pra

ctic

e Ti

p : E

xpre

ssly

requ

ire th

e pa

rent

to b

e re

spon

sibl

e fo

r br

each

by

the

subs

idia

ry

Dow

Jon

es v

. Abl

aise

, 606

F.3

d 13

38 (F

ed. C

ir. 2

010)

VII.

GR

AN

TS L

IMIT

ED

TO

EX

ISTI

NG

SU

BJE

CT

MAT

TER

ON

LY?

A.

Lice

nsed

pat

ents

= th

ose

whi

ch li

cens

or “o

wns

or c

ontro

ls”

1.U

se o

f pre

sent

tens

e m

eans

as

of e

ffect

ive

date

und

er N

Y la

w

Wi-L

AN

v. E

ricss

on(F

ed. C

ir. 2

014)

B.

Affi

liate

s =

only

thos

e as

of e

ffect

ive

date

, abs

ent a

n in

tent

to b

ind

futu

re a

ffilia

tes

Elli

ngto

n v.

EM

I Mus

ic(N

.Y. 2

015)

1-158


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

Una

utho

rized

re

prod

uctio

n pr

ohib

ited.

45

1.N

otifi

catio

n of

sub

licen

se g

rant

s

2.In

form

sub

licen

sees

to re

nder

obl

igat

ions

, $

to li

cens

or

3.Th

ink

abou

t iss

ues

like

perp

etua

l gra

nts,

au

to-r

enew

als,

etc

. in

licen

see’

s gr

ants

to it

s su

blic

ense

es

D.

Dra

fting

tips

for l

icen

sor:

VIII

.S

UB

LIC

EN

SE

A.

No

broa

der t

han

licen

see'

s (s

ublic

enso

r's) r

ight

s

B.

Term

inat

es u

pon

expi

ratio

n of

lice

nse,

unl

ess

stat

ed

othe

rwis

e

C.

Dra

fting

tip

for l

icen

see:

Pla

n fo

r sur

viva

l of e

nd u

ser

subl

icen

ses,

if n

eces

sary

1-159


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

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rized

re

prod

uctio

n pr

ohib

ited.

46

CO

MM

ON

MIS

TAK

E #

9 –

RO

YALT

Y PR

OVI

SIO

NS

I.R

OYA

LTY

BA

SE

A.

If sa

les

to d

istri

buto

rs o

r via

sub

licen

sors

-us

e fix

ed p

er u

nit

roya

lty ra

ther

than

%

B.

Gro

ss s

ellin

g pr

ice

easi

er to

det

erm

ine

than

“net

” qua

ntiti

es

1.D

oes

licen

see

wan

t to

open

its

book

s?

E.

Wat

ch o

ut fo

r non

-sal

e tra

nsfe

rs o

f goo

ds(e

.g.,

paym

ent i

n ki

nd)

C.

Wat

ch o

ut fo

r con

voye

d or

pac

kage

sal

es

1.R

oyal

ty a

s %

of t

otal

pric

e

2.P

ro ra

ta a

lloca

tion

base

d on

resp

ectiv

e lis

t pric

es

3.R

oyal

ty a

s fix

ed $

per

uni

t

F.W

atch

out

for r

elat

ed c

ompa

ny s

ales

D.

Wat

ch o

ut fo

r “fre

ebie

s” a

nd “l

oss

lead

ers”

1-160


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

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prod

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ited.

47

G.

Eco

nom

ic c

onve

nien

ce o

r mis

use?

1.Li

cens

e ag

reem

ents

com

mon

ly h

ave

roya

lty b

ase

incl

udin

g pr

oduc

tsof

a s

peci

fied

type

, whe

ther

or n

otth

ey a

re

actu

ally

cov

ered

by th

e pa

tent

s

a.A

typi

cal “

econ

omic

con

veni

ence

” arr

ange

men

t.

b.Av

oids

the

diffi

culty

(im

prac

ticab

ility

) of “

clai

ms

char

ting”

eve

ry p

rodu

ct, o

ver i

ts g

eogr

aphi

c an

d te

mpo

ral l

ifecy

cle

(man

ufac

ture

di

strib

utio

n us

e)

c.D

J: T

he li

cens

ee m

ight

arg

ueit

wou

ld b

e m

isus

eto

pay

on

non-

cove

red

prod

ucts

, thu

s, in

ord

er to

be

val

id, t

he li

cens

e sh

ould

be

cons

trued

to

requ

ire p

aym

ent o

nly

on c

over

ed p

rodu

cts .

d.P

ract

ice

Tip :

Sta

te “e

cono

mic

con

veni

ence

” and

“n

o m

isus

e”

Pow

erte

ch v

. Tes

sera

(Fed

. Cir.

Sep

t 30,

201

1)

1-161


(C) 2

017

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entE

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LP.

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n pr

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48

II.M

OS

T FA

VO

RE

D L

ICE

NS

EE

CLA

US

E

A.

If ov

erbr

oad

(“mor

e fa

vora

ble

term

s”),

caus

es tr

oubl

e

B.

Car

eful

ly d

efin

e ba

sis

for c

ompa

rison

C.

Lim

itatio

ns

1.S

ame

terr

itory

/fiel

d/te

chno

logy

3.Li

cens

es w

ith s

ubst

antia

lly s

imila

r ter

ms

a.Ta

ke a

ll te

rms

or n

one

b.B

ewar

e “m

utat

is m

utan

dis”

cla

uses

4.N

otifi

catio

n an

d ac

cept

ance

tim

e fra

mes

2.P

rosp

ectiv

e (fu

ture

) lic

ense

s on

ly

1-162


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

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prod

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n pr

ohib

ited.

49

D.

Exc

lude

(if g

rant

or)

1.C

ompa

nies

in w

hich

gra

ntor

has

inte

rest

/affi

liatio

n

4.O

ptio

ns

5.C

ross

-lice

nses

E.

Bew

are

of c

onfid

entia

lity

clau

se c

onfli

cts

F.S

peci

fy w

ho d

ecid

es “m

ore

favo

rabl

e”

2.S

ettle

men

ts o

f pas

t inf

ringe

men

ts (f

orbe

aran

ce,

rele

ase,

etc

.)

3.C

ompu

lsor

y lic

ense

s

1-163


(C) 2

017

Pat

entE

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Law

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up, L

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50

III.

RE

CO

RD

KE

EP

ING

, RE

PO

RTI

NG

, AU

DIT

S

A.

Req

uire

lice

nsee

repo

rts

1.Q

ty. m

anuf

actu

red

C.

“Thr

ee S

trike

s R

ule”

B.

Rep

orts

sho

uld

be c

ertif

ied

(“to

bes

t of l

icen

see’

s kn

owle

dge”

)

2.Q

ty. s

old

3.R

etur

ns

4.S

ampl

es

5.R

elat

ed c

ompa

ny s

ales

IV.

DO

N’T

FO

RG

ET

CO

MP

OU

ND

INTE

RE

ST

ON

LAT

E/M

ISS

ING

PA

YM

EN

TS

1-164


(C) 2

017

Pat

entE

sque

Law

Gro

up, L

LP.

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rized

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prod

uctio

n pr

ohib

ited.

51

CO

MM

ON

MIS

TAK

E #

10 –

NEG

OTI

ATIO

NS

I.C

OU

NS

EL

A.

Cor

pora

te v

. IP

v. p

aten

t lic

ensi

ng e

xper

t B

.G

et in

volv

ed e

arly

(at t

erm

she

et s

tage

)

II.TE

RM

SH

EE

T S

TAG

EA

.R

esol

ve a

ll m

ajor

issu

es a

t ter

m s

heet

sta

geB

.D

on’t

star

t dra

fting

too

early

III.

NE

GO

TIAT

ION

STA

GE

A.

Neg

otia

te is

sues

col

lect

ivel

yB

.Av

oid

pric

e “lo

ck in

”

IV.

BE

CA

RE

FUL

WIT

H “C

AR

RO

T A

ND

STI

CK

” LIC

EN

SIN

GA

.D

ecla

rato

ry ju

dgm

ent m

otio

nsB

.E

stop

pel a

nd la

ches

V.PA

Y AT

TEN

TIO

N T

O C

ALI

FOR

NIA

LAW

A.

Non

-com

pete

s in

valid

(Bus

. & P

rof.

Cod

e 16

600)

B.

Ass

ignm

ent v

ia R

TM (S

QL

Sol

utio

ns)?

C.

Free

tran

sfer

abili

ty o

f inb

ound

pat

ent l

icen

ses

(Sup

erB

race

)?

1-165


(C) 2

017

Pat

entE

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Law

Gro

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LP.

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52

Joe

Yang

is fo

undi

ng p

artn

er a

t Pat

entE

sque

Law

Gro

up, L

LP, a

nd p

revi

ousl

y se

rved

as

VP

& G

ener

al

Cou

nsel

of C

rypt

ogra

phy

Res

earc

h, In

c., w

hose

pat

ent a

nd te

chno

logy

lice

nsee

s m

ake

over

8 b

illio

n se

curit

y ch

ips

wor

ldw

ide

each

yea

r.

Joe

spec

ializ

es in

han

dlin

g IP

-cen

tric

deal

s (p

aten

t lic

ensi

ng/s

ales

, tec

h tra

nsac

tions

, JV

s an

d IP

as

pect

s of

M&

A),

and

in th

e us

e of

pat

ents

as

stra

tegi

c bu

sine

ss a

sset

s. H

e ha

s be

en le

ad c

ouns

el

on h

undr

eds

of d

eals

invo

lvin

g bi

llion

s of

dol

lars

, acr

oss

the

com

pute

r, el

ectro

nics

, sem

icon

duct

or,

ente

rtain

men

t, co

nsum

er g

oods

, man

ufac

turin

g, e

nerg

y an

d he

alth

care

indu

strie

s. J

oe h

as a

lso

been

an

arb

itrat

or, o

vers

een

com

plex

pat

ent l

itiga

tion,

led

the

deve

lopm

ent o

f wor

ldw

ide

corp

orat

e pa

tent

po

rtfol

ios,

and

ser

ved

as a

n ex

pert

witn

ess

for p

aten

t/tec

hnol

ogy

licen

sing

rela

ted

litig

atio

n.

Joe

is p

rofil

ed a

s on

e of

the

“Wor

ld’s

Lea

ding

IP S

trate

gist

s” a

nd “W

orld

’s L

eadi

ng P

aten

t and

Li

cens

ing

Atto

rney

s” b

y In

telle

ctua

l Ass

et M

anag

emen

t mag

azin

e. H

e is

als

o lis

ted

in M

arqu

is “W

ho’s

W

ho in

Am

eric

an L

aw” &

“Who

’s W

ho in

Am

eric

a.” J

oe c

o-ch

airs

the

“Adv

ance

d Li

cens

ing”

and

“A

dvan

ced

Pat

ent L

icen

sing

” cou

rses

at t

he P

ract

isin

g La

w In

stitu

te, a

nd h

as w

ritte

n fo

r jou

rnal

s an

d bo

oks,

and

bee

n ci

ted

by c

ourts

and

trea

tises

, on

pate

nt a

nd li

cens

ing

law.

He

is te

achi

ng th

e P

aten

t an

d Te

chno

logy

Lic

ensi

ng” c

ours

e at

Sta

nfor

d La

w S

choo

l, an

d pr

evio

usly

co-

taug

ht th

e “P

aten

t Law

an

d P

olic

y” c

ours

e at

U.C

. Ber

kele

y S

choo

l of L

aw.

Joe

form

erly

led

the

IP S

trate

gy &

Tra

nsac

tions

pra

ctic

e ba

sed

in th

e S

ilico

n Va

lley

offic

e of

Ska

dden

, A

rps

--a

prac

tice

he c

o-fo

unde

d w

hen

he h

elpe

d la

unch

the

firm

’s P

alo

Alto

offi

ce in

199

8.

Ear

ly in

his

car

eer,

Joe

was

a re

sear

ch e

ngin

eer i

n th

e ae

rosp

ace

and

ener

gy in

dust

ries.

He

hold

s a

J.D

. fro

m S

tanf

ord

and

a P

h.D

. (in

eng

inee

ring)

from

the

Cal

iforn

ia In

stitu

te o

f Tec

hnol

ogy,

whe

re h

e ha

s se

rved

on

the

boar

ds o

f the

Alu

mni

Ass

ocia

tion,

and

the

Cal

tech

Ass

ocia

tes.

He

can

be re

ache

d at

joe@

pate

ntes

que.

com

or 6

50-2

33-0

822.

SPEA

KER

BIO

GR

APH

Y –

JOSE

PH Y

AN

G

1-166


NOTES

1-167


NOTES

1-168

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