What is Being Licensed?

This presentation should not be considered as Efrati Galili & Co., Law Offices' official opinion or legal advice but only as general information. By this presentation Efrati Galili & Co., Law Offices does not purport to give any legal advise and without derogating from the generality of the aforesaid, as Israeli lawyers Efrati Galili & Co., Law Offices does not purport to have knowledge, expertise or give legal advise regarding any law other than the law of the State of Israel. Efrati Galili & Co., Law Offices cannot be held responsible for any person's or entity's reliance on this presentation. Furthermore, this presentation is the copyright of Efrati Galili & Co., Law Offices and cannot be used in any way without the prior written approval of Efrati Galili & Co, Law Offices.

Introduction

Modern world challenges us with internet, worldwide branded smart-phones and global markets.

We are challenged by the need to protect investments of time and money in creating new technologies, works of art and such other works, which we may wish to protect, worldwide.

The statutes acknowledging non-tangible rights do not fully meet modern needs of business.

Test Case – Cleaning Robot Mechanical Parts Electronic Circuits Software Documentation Advertising Material

What is Being Licensed?

Rights ≠ tangible assetsIntellectual property

rightsKnow HowInformation

Assets

TangibleNon - Tangible

PhysicalRights

Can be transferred by an act.

Requires acknowledgment and performance in accordance with applicable law in order to transfer.

In re: A.S.H.I.R (1998) [i]: Should we award compensation to manufacturers who developed their products while not registered any patents or industrial design rights?

If the developer proves “an additional thing” such as originality and material investment of time and resources, he could be awarded restitution from competitors whose products are materially similar, based on unjust enrichment.

Intellectual Property vs. Unjust Enrichment

Territoriality In re: Harar V. Dialit (2006) [ii] :As Industrial

Design rights are territorial, the court cannot award any remedy for infringement of an Industrial Design, duly registered with the Israeli Patents and Industrial Designs Office, occurring out of the State of Israel.

The doctrines regarding Unjust Enrichment do not apply to alleged infringements out of the State of Israel.

The Need for Explicit Definitions The license agreement should include an

acknowledgment by the licensee of the licensor's rights in and to the “technology” and each portion of it in order to provide protection for the licensor.

Such protection is limited to the licensee. Only intellectual property rights, (which are duly acknowledged by applicable law in the territory in which the business is operated), can provide protection against third parties in such territory

Know-How - is that an Asset? Commercial Torts law [iii]

Know-How should fulfill the conditions of Trade

Secrets set forth in the Commercial Torts Law in order to be protected.

As the Commercial Torts Law does not include a definition of “Know-How” it should be carefully defined in the license agreement.

Trade Secrets are usually not considered as assets under law.

“Trade Secret”

Any technical or business information. Gives the business a competitive

advantage. Is not known by the public or can be

easily obtained by the public The holder of such secrets takes

measures to protect the confidentiality of such secrets.

Territoriality of Trade Secrets If trade secrets are hacked by a

hacker from outside the jurisdiction in which they are kept, would the owner of the trade secrets have a cause of action against the hacker if the law in the state where the hacking occured, does not protect trade secrets?

Goals of Defining

Ensuring that the choice of law to govern the license acknowledges or at least protects the material portion of the technology which is the subject matter of the license.

Acknowledgment by agreement of proprietary rights which shall bind the parties.

Defining What is Being Licensed: Following are proposed definitions of the rights being

licensed to develop and manufacture our Cleaning robot:

Proposed definitions “Intellectual Property Rights”

Means any and all of the following, as they exist throughout the world: Patents Copyrights Trademarks Rights (including, without limitation,

rights under applicable trade secret laws) in Know-How and

Any and all other intellectual property rights and/or proprietary rights.

“Patents” Means patents and patent applications (which for

the purposes of this Agreement shall be deemed to include certificates of invention and applications for certificates of invention), including, without limitation, provisionals, divisionals, continuations, continuations-in-part, reissues, reexaminations, renewals, extensions, supplementary protection certificates, and the like of any such patents and patent applications, and any foreign equivalents thereof, and shall include patents whose term has been extended by statutory patent term adjustments or extensions in any jurisdiction in the world.

“Copyrights” Means copyrights and related rights

in original published and unpublished works of authorship fixed in a tangible medium of expression and related registrations and applications for registration in the United States Copyright Office or in any similar office or agency anywhere in the world.

“Trademarks” Means trademarks, trade names,

brand names, logos, symbols, service marks, designs and the goodwill of the business symbolized thereby, and related registrations and applications for registration in any statutory trademark registration office or agency anywhere in the world.

“Know-How” Means all confidential, technical and/or proprietary

information and knowledge, whether or not patentable and whether or not in written form, including, without limitation, information, inventions, know-how and knowledge regarding inventions, discoveries, techniques, research in progress, trade secrets, systems, methods, processes, algorithms, technical data, formulae, drawings, designs, schematics, blueprints, flow charts, models, prototypes, techniques, practices, manufacturing and design information, financial, business, marketing and client information, information regarding the Technology and/or Licensed Products [Note: specific information regarding the

applicable field].

“Technology” Means any and all technology and/or intellectual property

and/or tangible embodiments thereof, including, without limitation, inventions, discoveries, designs, specifications, developments, methods, modifications, improvements, processes, know-how, show-how, techniques, algorithms, compilations, databases, computer software and code (including, without limitation, software and firmware listings, assemblers, applets, compilers, Source Code, Object Code, net lists, design tools, user interfaces, application programming interfaces, protocols, formats, documentation, annotations, comments, data, data structures, databases, data collections, system build software and instructions), mask works, formulae, techniques, supplier and customer lists, trade secrets, graphics or images, text, audio or visual works, materials that document design or design processes, or that document research or testing, schematics, diagrams, product specifications and other works of authorship.

“Licensed IP” Means

Any and all Technology developed or otherwise owned by Licensor as of the Effective Date [i.e. of the license] that is embodied in or related to……..[can be software, hardware, materials, documentation – all related to developed products or products which are under development, which should be defined as the subject matter of the license] and

Any and all Intellectual Property Rights owned by Licensor as of the Effective Date that claim or relate to …. [again, as in previous brackets] including, without limitation, all Patents, Copyrights….. listed on Exhibit A.

“Licensor's Products” means cleaning robots embodying the

Technology or Licensed IP. [should include a specific description of the end products, which are the subject matter of the license. Such products do not have to be marketable products at the time of the execution of the license as the license may include rights to further improve the technology and complete the development of the products.].

“Licensed Products” means Licensor's Products and any

and all products in the Field, the making, using, selling, offering for sale or importing of which by Licensor would implement or embody the Technology or Licensed IP. [As Licensor may wish to retain the right to use the Technology and/or IP rights, the license could grant rights only in a certain field of business].

“Field” Means the field of cleaning robots.

“Object Code” Means computer programming code,

substantially or entirely in binary or machine-readable form, which is intended to be directly executable by a computer after suitable processing and linking.

“Source Code” Means human-readable form of

computer programming code, including related programmer comments and procedural language.

“Laws” Means all laws, statutes, rules,

regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision of any state worldwide.

The right to sue as an independent licensed right:

The right to protect what is being licensed may be limited by law to the licensor.

policy considerations could affect the extent of the right to sue. [See decisions regarding parallel import – iv]

In Israel: The rule is that exclusive distribution does not include the right to sue infringers.

The right to sue is separately addressed in the license and may be a part of what is being licensed.

A Proposed Clause Infringement by 3rd Parties

1- Notice of Infringement: Each Party shall Provide written notice to the other Party promptly after becoming aware of any infringement of the Licensed IP,that may come to its attention.

2. Licensee shall have the sole right, but not the obligation, to prosecute or control the prosecution of any Third Party infringement of the Licensed IP and to defend or control the defense of the Licensed IP in any declaratory judgment action brought by a Third Party (which alleges invalidity, unenforceability, or non-infringement of the Licensed IP;)

A Proposed Clause Infringement by 3rd Parties

3. Licensor shall assist Licensee in any action being controlled, prosecuted or defended by Licensee if so requested, and Licensor hereby consent to filing or being joined in such action or proceeding if requested by Licensee or required by applicable law in order for such action or proceeding to commence or continue;

A Proposed Clause Infringement by 3rd Parties

4. Licensor hereby consent to Licensee joining any action brought against Licensor, if so requested by Licensee, and shall assist Licensee in any such action and in Licensee's joining such action or proceeding;

5. If Licensee is unable to legally become a party to any such action, Licensor shall commence such action and act on behalf of, and at the direction and control of, Licensee. Licensor shall not take any action without the prior written consent of Licensee.

A Proposed Clause Infringement by 3rd Parties

6. Licensee shall consider in good faith, but shall not be obligated to implement, any comments or feedback provided by Licensor regarding such actions or proceedings;

7. Each Party shall keep the other Parties informed of any material developments in such actions or proceedings;

A Proposed ClauseInfringement by 3rd Parties

8. Licensee's rights under this Section 2# include, without limitation, the choice of counsel representing Licensee and/or Licensor;

9. Licensee shall bear the reasonable costs and expenses of Licensor with regard to the fulfillment of the obligations under this Section # in the event such costs and expenses are previously approved by Licensee in writing.

The End

List of Sources and Thanks

[i] Civil appeal 5768/94 A.S.H.I.R import, production and distribution v. Forum accessories and products LTD. (P.D) 52 (4),289.

[ii] Civil appeal 8831/05 Avraham Harar v. Dialit LTD. [iii] Commercial Torts Law, 5759-1999. [iv] Civil Appeal 371/89 Laibowitz v. Eliyahu, P.D. 44

(2) 309; Civil Case 1124/01; TRENDMASTERS INC v. Asher Ashkenazi Rotem production and Marketing of Toys 1995 Ltd (2003); Civil appeal 2173/94 Tele Event Led. v. Zahav channels and Co., P.D 55 (5) 529.

Many thanks to Ayelet Betesh.