TreatiseTreatise

Patent Licensing: Strategy, Negotiation, and Forms

 by Mark S. Holmes
 
 Copyright: 2000-2012
 Last Updated: November 2012

 Product Details >> 

Product Details

  • ISBN Number: 0872241378
  • Page Count: 866
  • Number of Volumes: 1
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Even simple patent licenses involve numerous clauses and provisions. So it’s easy for the wrong words to find their way into the most basic agreements, triggering court clashes and quashing business opportunities for licensors and licensees.

PLI’s Patent Licensing: Strategy • Negotiation • Forms makes certain that you avoid this needless trouble, by giving you the comprehensive, hands-on guidance you need to negotiate and draft fair and problem-free patent licenses.

With the help of hundreds of adaptable sample licensing clauses and provisions, this practical, plain-English resource ensures that every term, every phrase in the final, hammered-out agreement serves your client’s business interests, satisfies the other party, and minimizes the threat of disputes. Throughout, Patent Licensing warns you about and helps you ward off the legal and commercial risks associated with this intricate process, whether you’re the licensor or licensee. Included is key guidance on how to keep vital company information confidential to preserve competitive advantage.

Updated at least once a year, Patent Licensing: Strategy • Negotiation • Forms is a vital handbook for patent practitioners and other intellectual property attorneys, corporate counsel, corporate executives, patent officials, and inventors.

  Preface
Chapter 1: Definitions; And Examples
  • § 1:1 : Purpose of the Definitions Section1-1
  • § 1:2 : Defining Industry Jargon1-2
  • § 1:3 : Defining Particular License Terms1-4
    • § 1:3.1 : Affiliates1-4
      • [A] : Affiliate Restrictions1-6
    • § 1:3.2 : Best Efforts1-7
    • § 1:3.3 : Combination Products1-10
    • § 1:3.4 : Commercially Reasonable Efforts1-10
    • § 1:3.5 : Field of Use1-11
    • § 1:3.6 : First Commercial Sale1-12
    • § 1:3.7 : Improvements1-13
    • § 1:3.8 : “Know-How” or “Technology”1-15
    • § 1:3.9 : “Licensor” and “Licensee”1-19
  • § 1:4 : Case Study: Ambiguities in License Agreements1-19
    • § 1:4.1 : The Devil Is in the Details (and the Definitions)1-20
      • [A] : Licensee’s Interpretation1-23
      • [B] : Patentee’s Interpretation1-23
      • [C] : Federal Circuit’s Analysis of Ambiguous Language1-23
      • [D] : Construction Against the Drafter1-24
      • [E] : Contra Proferentum Only After Construction of the License Agreement1-25
  • § 1:5 : Why Patentees Should Consider Licensing Their Patents1-26
  • Examples :1 EX-1
Chapter 2: Grant of License; And Examples
  • § 2:1 : Operative Words2-1
  • § 2:2 : Exclusivity2-4
  • § 2:3 : Sublicenses2-5
    • § 2:3.1 : Reasons to Sublicense2-5
    • § 2:3.2 : Sublicense Safeguards2-6
      • [A] : Approval of Sublicensee2-6
      • [B] : Stepping into the Licensee’s Shoes2-7
      • [C] : Revenue Participation2-9
  • § 2:4 : Improvements Included in Grant2-9
  • § 2:5 : Reservation of Rights: Those Not Specifically Granted Are Retained2-11
  • § 2:6 : March-In Rights: Obligations Arising from Federal Funding2-11
  • § 2:7 : Most Favored Nation2-13
    • § 2:7.1 : All-or-Nothing Option2-15
    • § 2:7.2 : More Flexible Approach2-16
    • § 2:7.3 : No Retroactive Effect2-16
    • § 2:7.4 : Administrative Burden2-17
    • § 2:7.5 : Government Sales Exclusion2-17
    • § 2:7.6 : Government Regulation Exclusion2-18
  • § 2:8 : Reservation of Rights: To Practice the Invention2-19
    • § 2:8.1 : Licensor’s Own Use2-19
    • § 2:8.2 : Lincensor Grant to Third Parties2-19
    • § 2:8.3 : Confidentiality2-21
    • § 2:8.4 : Savings Clauses2-23
  • § 2:9 : Limiting the Scope of the License Grant for Competitive Reasons2-24
  • § 2:10 : Limiting Uses of the Patent2-26
  • Examples :2 EX-1
Chapter 3: Term and Termination; And Examples
  • § 3:1 : Duration3-2
    • § 3:1.1 : Life of the Patent3-2
    • § 3:1.2 : Number of Years3-2
  • § 3:2 : Grounds for Termination3-3
    • § 3:2.1 : Acquisition of Licensee by a Competitor3-3
    • § 3:2.2 : Failure to Pay Royalties3-4
    • § 3:2.3 : Failure to Pay Minimum Royalty3-4
    • § 3:2.4 : Lack of Royalty Payments Attributable to Failure to Exploit the License3-5
    • § 3:2.5 : Marketing a Competing Product Combined with Failure to Achieve Royalty Goal3-6
  • § 3:3 : Curing Breach to Avoid Termination3-7
  • § 3:4 : Duties and Rights of Licensee upon Termination3-8
    • § 3:4.1 : Duty to Return Confidential Information3-8
    • § 3:4.2 : Duty to Cease Further Sublicensing3-8
    • § 3:4.3 : Right to Dispose of Inventory3-9
      • [A] : Minimum Inventory Value3-9
      • [B] : Time Limit in Which to Sell Inventory3-10
  • § 3:5 : Treatment of Patent Licenses in Bankruptcy3-11
    • § 3:5.1 : Executory Contracts3-11
    • § 3:5.2 : Assignment of Nonexclusive Licenses in Bankruptcy3-11
    • § 3:5.3 : Assignment of Exclusive Licenses in Bankruptcy3-12
    • § 3:5.4 : How a Licensor May Protect Itself in Bankruptcy3-14
    • § 3:5.5 : Obligation to Pay Royalties3-14
    • § 3:5.6 : Contractual Provisions3-15
    • § 3:5.7 : Separating the Right to Receive Royalties from Ownership of the Patents3-17
    • Examples :3 EX-1
Chapter 4: Royalties; And Examples
  • § 4:1 : The Heart of the License4-2
  • § 4:2 : Upfront or “Signing” Fees4-2
    • § 4:2.1 : Common Versus Preferred Stock4-2
    • § 4:2.2 : Stock Warrants4-3
  • § 4:3 : Research-Funding Royalties4-6
  • § 4:4 : Milestone Payments4-6
  • § 4:5 : Minimum Royalty4-8
  • § 4:6 : Royalties Based on Sales (Earned Royalties)4-9
    • § 4:6.1 : Generally4-9
    • § 4:6.2 : Valuation of Sales4-9
    • § 4:6.3 : Affiliate or Sublicensee Sales4-11
    • § 4:6.4 : Combination Sales4-11
    • § 4:6.5 : Government Sales4-14
    • § 4:6.6 : No Multiple Royalties4-15
    • § 4:6.7 : Deduction for Taxes4-15
    • § 4:6.8 : Volume Discounts4-16
    • § 4:6.9 : When Royalties Accrue4-17
    • § 4:6.10 : Double Royalties4-18
  • § 4:7 : Government-Imposed Royalty Ceilings4-19
  • § 4:8 : Royalties Paid by Licensees Outside the United States4-20
    • § 4:8.1 : Currency Conversion Date4-20
    • § 4:8.2 : Repatriation of Profits4-21
  • § 4:9 : Enforcing Payment Obligations4-21
  • § 4:10 : Royalty Payments If Patent Not Yet Issued4-22
  • § 4:11 : Expiration of the Patent4-23
  • § 4:12 : Royalties After Patent Expiration4-23
    • § 4:12.1 : Absolute Bar (Brulotte v. Thys Co.)4-23
    • § 4:12.2 : Absolute Bar Criticized (Scheiber v. Dolby Laboratories)4-24
    • § 4:12.3 : Brulotte Not Always Followed4-25
    • § 4:12.4 : Practical Effects of Brulotte4-26
  • § 4:13 : Determining Royalty Rates4-27
  • § 4:14 : Definition of Sublicense Consideration4-28
  • Examples :4 EX-1
Chapter 5: Record Keeping and Reports; And Examples
  • § 5:1 : Importance of Record Retention5-1
  • § 5:2 : Duration of Record Retention5-2
  • § 5:3 : Certification of Royalty Statements5-3
  • § 5:4 : Right to Audit5-3
    • § 5:4.1 : Justification5-3
    • § 5:4.2 : Causes of Underreporting5-4
    • § 5:4.3 : Who Pays5-5
    • § 5:4.4 : Minimizing Inconvenience5-6
    • § 5:4.5 : Frequency5-7
    • § 5:4.6 : Confidentiality5-8
    • § 5:4.7 : Information Revealed to Licensor5-9
    • § 5:4.8 : Copies of Licensee’s Records5-10
    • § 5:4.9 : Copies of the Audit5-12
  • § 5:5 : Licensee’s Audited Financial Statements5-12
  • § 5:6 : Small-Fry Provisions5-12
  • § 5:7 : Information to Be Reported5-13
  • Examples :5 EX-1
Chapter 6: Prosecution and Maintenance; And Examples
  • § 6:1 : Importance of Maintenance and Prosecution of Licensed Patent Rights6-2
  • § 6:2 : Control over the Process6-2
  • § 6:3 : Improvements6-4
  • § 6:4 : No Burden, No Benefit6-4
  • § 6:5 : Apportionment of Prosecution Costs6-5
  • § 6:6 : PTO Maintenance Fees6-6
  • § 6:7 : Incapacitation6-6
  • § 6:8 : Importance of Patent Marking6-7
    • § 6:8.1 : Marking Not Required for Method or Process Claims6-9
    • § 6:8.2 : False Marking6-10
      • [A] : Pequignot v. Solo Cup Co.6-10
        • [A][1] : Article Covered by an Expired Patent Is “Unpatented”6-12
        • [A][2] : Intent to Deceive Required (“For the Purpose of Deceiving the Public”)6-13
          • [A][2][a] : Rebuttable Presumption of Intent to Deceive6-13
          • [A][2][b] : Knowledge Is Insufficient to Prove Intent if the Marker Did Not Consciously Desire That the Public Be Deceived6-13
          • [A][2][c] : Burden of Proof Is Preponderance of Evidence6-14
          • [A][2][d] : Rebutting the Presumption: Expired Patent Markings6-14
          • [A][2][e] : Rebutting the Presumption: “May Be Covered” Language6-15
        • [A][3] : Conclusion6-16
      • [B] : Forest Group, Inc. v. Bon Tool Co.6-16
        • [B][1] : Intent to Deceive6-16
        • [B][2] : Penalties Must Be Imposed on a Per-Article Basis6-17
          • [B][2][a] : Statutory Language6-18
          • [B][2][b] : Policy Considerations6-19
          • [B][2][c] : The Qui Tam Provision6-19
          • [B][2][d] : Comfort Language?6-20
          • [B][2][e] : Conclusion6-20
      • [C] : Practice Tips6-21
      • [D] : Contractual Provisions6-22
        • [D][1] : Obligate the Licensee to Properly Mark6-22
        • [D][2] : Prohibit Licensee from Removing Marks6-22
        • [D][3] : Licensor Responsible for Accuracy6-23
        • [D][4] : Licensor Obligation to Inform When to Discontinue Marking6-23
        • [D][5] : Licensor Indemnification for Incorrect Information6-23
  • Examples :6 EX-1
Chapter 7: Infringement; And Examples
  • § 7:1 : Key Issues7-1
  • § 7:2 : Which Party to Bring Suit7-2
  • § 7:3 : Ability to Name the Licensor7-3
  • § 7:4 : Who Pays If Licensor Is Named by Licensee7-3
  • § 7:5 : Licensor Consent to Settlement Reached by Licensee7-5
  • § 7:6 : Indemnifying the Licensor from Sanctions7-5
  • § 7:7 : Licensor May Sue If Licensee Does Not7-6
  • § 7:8 : Licensor’s Protection in Declaratory Judgment Actions7-7
  • § 7:9 : Licensee Not to Encourage Others to Infringe7-7
  • Examples :7 EX-1
Chapter 8: Indemnification; And Examples
  • § 8:1 : Purpose of Indemnification8-2
  • § 8:2 : Infringement Indemnity8-2
  • § 8:3 : California Law Considerations8-3
    • § 8:3.1 : Flexibility8-3
    • § 8:3.2 : Section 2778 of the Civil Code8-4
    • § 8:3.3 : Parties May Opt Out of Section 27788-5
    • § 8:3.4 : Duty to Defend8-5
      • [A] : Duty to Defend Is Different from Duty to Pay Defense Costs8-5
      • [B] : Duty Is Statutory, but May Be Excluded8-6
      • [C] : Damages8-6
      • [D] : Duty to Defend Arises Immediately Upon Tender8-7
      • [E] : Circumstances in Which the Duty Would Terminate8-7
    • § 8:3.5 : Indemnity for Intellectual Property Infringement Can Be Parsed8-8
  • § 8:4 : What Is Protected8-8
  • § 8:5 : “Maximum Extent Permitted by Law”8-9
  • § 8:6 : Indemnification of Sublicensees8-9
  • § 8:7 : Immediate Payment8-9
  • § 8:8 : Threshold Amount8-10
  • § 8:9 : Indemnification to Survive License Termination8-11
  • § 8:10 : No Personal Liability; No Piercing the Corporate Veil8-11
  • § 8:11 : Failure to Defend8-11
  • § 8:12 : Indemnitee Responsible for Aggravated Damages8-12
  • § 8:13 : Mitigation8-12
  • § 8:14 : Keeping the Indemnitee Honest8-13
  • § 8:15 : Indemnification on an After-Tax Basis8-13
  • § 8:16 : Infringement Excluded from Indemnification8-14
  • § 8:17 : Ways in Which Licensors Reduce Their Indemnity Risk8-15
    • § 8:17.1 : Indemnification Limited to Patents of Which Licensor Is Aware As of Effective Date8-15
    • § 8:17.2 : Indemnification Limited to Capped Amounts8-16
    • § 8:17.3 : Indemnification Obligation Satisfied by Corrective Acts8-17
    • § 8:17.4 : Indemnification Limited by Licensee’s Acts8-18
  • Examples :8 EX-1
Chapter 9: Export Controls; And Examples
  • § 9:1 : Exporting Technology: Scope of Federal Regulation9-1
  • § 9:2 : Delegating Responsibility to the Licensee9-2
  • § 9:3 : Acknowledging Possible Prohibition or Delay9-3
  • § 9:4 : Caveat for Licensees Regarding Vague Responsibilities9-3
  • § 9:5 : Caveat for Licensors Regarding Representations of Compliance9-4
  • § 9:6 : No Contravention of the Law9-5
  • § 9:7 : Indemnification9-6
  • Examples :9 EX-1
Chapter 10: Use of Licensor's Names; And Examples
  • § 10:1 : Why Use of Licensor’s Names Is Important10-1
  • § 10:2 : Allowing Use: Potential Advantages to Licensor10-1
  • § 10:3 : Protecting Image, Reputation, and Goodwill10-2
  • § 10:4 : Enforcing Proper Behavior10-3
  • § 10:5 : Prohibition of Use10-3
  • § 10:6 : Exception for Public Filing and Financing Efforts10-4
  • § 10:7 : Quality Controls and Product Monitoring10-5
  • Examples :10 EX-1
Chapter 11: Representations and Warranties; And Examples
  • § 11:1 : Introduction11-1
  • § 11:2 : Representation of Validity: No Prior Art Withheld During Prosecution11-2
  • § 11:3 : Simple Representation of Ownership11-2
  • § 11:4 : More Complete Representation of Ownership11-2
    • § 11:4.1 : Inventorship11-3
    • § 11:4.2 : No Further Rights Required11-5
    • § 11:4.3 : Patent Application Status11-5
    • § 11:4.4 : No Dilution of Exclusivity11-6
    • § 11:4.5 : Clean Title11-6
  • § 11:5 : Overbroad Representations11-7
  • § 11:6 : Representations Regarding Technical Soundness11-8
  • § 11:7 : Representations Regarding Infringement11-9
  • Examples :11 EX-1
Chapter 12: Due Diligence; And Examples
  • § 12:1 : Why Licensors Want to Impose Due Diligence Obligations12-1
  • § 12:2 : Discretion in Choice of Initial Markets12-3
  • § 12:3 : Minimum Expenditures12-4
  • § 12:4 : Specified Efforts Towards Commercialization12-5
  • § 12:5 : Specified Obligations Are Several12-6
  • § 12:6 : Licensee May Not Engage in Conflicting Activities12-7
  • § 12:7 : Licensor’s Technical Assistance to Licensee12-8
    • § 12:7.1 : Literature12-9
    • § 12:7.2 : Logistics and Expenses12-9
      • [A] : Mutual Training Obligations12-9
      • [B] : Licensor’s Training Obligations to Licensee12-10
      • [C] : Limit to Number of Licensee Employees Trained12-11
      • [D] : Frequency of Training Sessions12-11
      • [E] : Not Licensee’s Employees12-11
      • [F] : Liability and Insurance12-12
      • [G] : Cap on Licensor’s Costs12-13
      • [H] : Interference with Licensor’s Operations12-13
    • § 12:7.3 : Limit to Information Requests12-13
  • § 12:8 : Improvements12-15
    • § 12:8.1 : Notice of Improvements12-15
    • § 12:8.2 : Improvements to Be Included in License12-16
    • § 12:8.3 : Abandonment of Patent Rights to Improvement12-17
  • § 12:9 : Collaboration12-18
  • § 12:10 : Outline of the FDA Approval Process12-18
  • Examples :12 EX-1
Chapter 13: Confidentiality; And Examples
  • § 13:1 : Why the Need13-1
  • § 13:2 : Proper Use of Confidential Information13-2
  • § 13:3 : No Reverse Engineering13-2
  • § 13:4 : Samples13-3
  • § 13:5 : Arbitration13-3
  • § 13:6 : Terms of the Agreement13-4
  • § 13:7 : Defining Confidential Information13-5
  • Examples :13 EX-1
Chapter 14: Arbitration; And Examples
  • § 14:1 : Patent-Related Arbitration14-1
  • § 14:2 : Secrecy14-2
  • § 14:3 : “Arising Out of” Versus “Relating To”14-3
  • § 14:4 : Limiting Discovery14-4
  • § 14:5 : Arbitrator Expertise14-5
  • § 14:6 : Limitation on Damages Awardable14-6
  • § 14:7 : Venue and Choice of Law14-6
  • § 14:8 : Further Restrictions on the Arbitrator14-7
  • Examples :14 EX-1
Chapter 15: Miscellaneous; And Examples
  • § 15:1 : Assignment15-2
    • § 15:1.1 : Consent of Licensor15-2
    • § 15:1.2 : Participation in Any Consideration for the Assignment15-3
    • § 15:1.3 : Assignee Assumes Obligations15-4
    • § 15:1.4 : Assignment Not a Release of Licensee’s Accrued Obligations15-4
    • § 15:1.5 : Licensee Guarantees Assignee Performance15-4
    • § 15:1.6 : Transfer of Business15-5
    • § 15:1.7 : De Facto Assignments15-5
  • § 15:2 : Merger15-6
  • § 15:3 : Severability15-6
    • § 15:3.1 : Basic Provision15-6
    • § 15:3.2 : Reformation by the Parties15-7
    • § 15:3.3 : Reformation by the Court15-7
    • § 15:3.4 : Waiver of Invalid Provisions15-8
    • § 15:3.5 : All-Inclusive Provision15-9
  • § 15:4 : Patent Marking15-10
  • § 15:5 : Waiver15-10
  • § 15:6 : Notice15-11
  • § 15:7 : Independent Contractors15-11
  • § 15:8 : Counterparts15-12
  • § 15:9 : Force Majeure and Hardship15-12
  • § 15:10 : Further Assurances15-13
  • § 15:11 : Governing Law (Without Venue or Jurisdiction Provisions)15-14
  • § 15:12 : Jurisdiction, Venue, and Service15-14
  • § 15:13 : United States Manufacture15-15
  • § 15:14 : Most Favored Licensee15-15
  • § 15:15 : Reservations15-17
  • § 15:16 : Reverse Engineering15-18
  • § 15:17 : Construction15-20
  • § 15:18 : Headings15-20
  • § 15:19 : No Finder’s Fee15-20
  • § 15:20 : Costs of Agreement15-20
  • § 15:21 : No Strict Construction15-21
  • § 15:22 : Publicity15-21
  • § 15:23 : Consent15-23
  • § 15:24 : Taxes15-24
  • § 15:25 : No Endorsement15-25
  • § 15:26 : No Third Party Beneficiaries15-25
  • § 15:27 : Effect of Merger on Third Party Infringement15-25
  • § 15:28 : Amendments15-26
  • § 15:29 : Agreement Not to Solicit Employees15-26
  • § 15:30 : Intellectual Property of Inventor’s Spouse15-26
  • § 15:31 : Compliance with Law15-27
  • § 15:32 : Governmental Approvals15-27
  • § 15:33 : No Fiduciary Duties15-28
  • Examples :15 EX-1
Chapter 16: License Negotiations
  • § 16:1 : Introduction16-1
  • § 16:2 : Long-Term Relationship16-1
    • § 16:2.1 : Multiple Nonexclusive Licenses16-2
  • § 16:3 : Planning16-2
    • § 16:3.1 : Know Your Position16-2
    • § 16:3.2 : Put Expectations in Writing16-3
    • § 16:3.3 : Deal Points16-4
  • § 16:4 : Useful Habits for Negotiators16-5
    • § 16:4.1 : Listen and Observe16-5
    • § 16:4.2 : Ask If You Do Not Understand16-6
    • § 16:4.3 : Be Brief and Clear16-7
  • § 16:5 : Patterns of Negotiating Behavior16-7
    • § 16:5.1 : Good Cop/Bad Cop16-7
    • § 16:5.2 : The Backtracking Negotiator16-8
    • § 16:5.3 : The Intimidator16-8
    • § 16:5.4 : How to Walk Away from a Negotiation16-9
    • § 16:5.5 : If the Other Side Walks Away16-11
      • [A] : When You Are at Fault16-11
      • [B] : When the Other Side Is at Fault16-11
    • § 16:5.6 : The Phantom Boss16-12
    • § 16:5.7 : Keep Your Eye on the Ball16-12
Chapter 17: Strategies for the New Patent Law Frontier; And Examples
  • § 17:1 : Strategies Are Needed to Address Changes in the Law17-4
  • § 17:2 : Declaratory Judgments: The New Frontier17-5
    • § 17:2.1 : MedImmune17-5
      • [A] : Facts17-5
      • [B] : Holding17-6
    • § 17:2.2 : SanDisk: Federal Circuit Construes MedImmune17-7
      • [A] : Facts17-7
      • [B] : Holding17-11
      • [C] : Promise Not to Sue: Actions Speak Louder Than Words17-12
      • [D] : What’s a Patentee to Do? The Federal Circuit Offers Advice17-13
      • [E] : What Is a “Suitable” Confidentiality Agreement?17-14
        • [E][1] : Confidentiality17-14
        • [E][2] : Nonuse17-14
        • [E][3] : Nonlitigation Provision17-15
  • § 17:3 : Tactics and Strategies After MedImmune and SanDisk17-15
    • § 17:3.1 : Licensee Tactics17-15
      • [A] : Limiting Infringement Damages Under the Guise of a License Agreement17-15
      • [B] : Attempting to Renegotiate License Terms17-16
    • § 17:3.2 : Second Circuit’s Speakeasy Case: Under Lear, Inc. v. Adkins, No-Challenge Clauses Unenforceable If Entered into Before Litigation17-16
      • [A] : Background17-16
      • [B] : The Lear Case17-18
      • [C] : Four Ways That Patent Disputes Are Resolved17-19
      • [D] : Reasoning of MCA Is Persuasive17-22
      • [E] : Absence of Discovery Forecloses Opportunity to Assess Patent Validity17-23
      • [F] : Distinguishing Federal Circuit’s Baseload Energy, Inc.17-24
      • [G] : Lear Leaves Some Discretion: The Balancing Test17-25
      • [H] : Comments and Questions About Speakeasy17-25
        • [H][1] : No Reference to MedImmune17-25
        • [H][2] : Federal Circuit Declined Jurisdiction17-26
        • [H][3] : Scope of the Decision?17-26
        • [H][4] : Will the Decision Encourage Litigation?17-26
        • [H][5] : Liquidated Damages Prohibited?17-26
        • [H][6] : Alternate Dispute Resolution?17-27
    • § 17:3.3 : Licensor Tactics17-27
      • [A] : Severability and Blue Line Provisions17-27
      • [B] : Prohibition on Challenges17-27
        • [B][1] : Prohibition More Favorable to Licensee17-28
      • [C] : Termination Upon Challenge17-29
      • [D] : Termination with Cure17-29
      • [E] : Termination with Cure by Dismissal of Action17-30
      • [F] : Prepaid and Signing Royalties17-30
      • [G] : Royalty Payments Continue During Declaratory Judgment Action17-31
        • [G][1] : Royalty Payments Not Escrowed17-31
        • [G][2] : Must the Licensee Repudiate the License Agreement?17-31
      • [H] : Increased Royalties Upon Bringing a Declaratory Judgment Action17-31
      • [I] : Increased Royalties Upon Losing Declaratory Judgment Action17-32
      • [J] : Signing Royalties Nonrefundable17-32
      • [K] : Licensee Pays Patentee’s Attorneys’ Fees17-32
        • [K][1] : Attorneys’ Fees If Challenge Is Brought17-33
        • [K][2] : Attorneys’ Fees If Challenge Is Unsuccessful17-33
      • [L] : Choice of Venue17-33
      • [M] : File First, Negotiate Later17-33
      • [N] : Licensee Admissions17-34
      • [O] : Definition of “Patent Challenge”17-34
      • [P] : Controlling Sublicensees17-35
      • [Q] : No Termination for Challenge As Defense Outside Scope of License17-35
      • [R] : Drop Dead; No Opportunity to Cure17-36
      • [S] : No Future Challenges17-37
      • [T] : “Show Me Your Cards”17-37
      • [U] : Solicitation Letters17-38
      • [V] : Advantages of Arbitration17-38
    • § 17:3.4 : Conclusion17-39
  • § 17:4 : Quanta Computer: Rebirth of Patent Exhaustion?17-39
    • § 17:4.1 : Doctrine of Patent Exhaustion (or “First Sale” Doctrine)17-40
    • § 17:4.2 : Facts in Quanta Computer17-41
    • § 17:4.3 : Reliance on Univis Lens Case17-42
    • § 17:4.4 : Patent Exhaustion Applies to Method Claims17-43
    • § 17:4.5 : A Product Must Embody a Patent to Trigger Exhaustion17-45
    • § 17:4.6 : Patent Exhaustion Can Be Applied Across Patents17-47
    • § 17:4.7 : Exhaustion Is Triggered Only by a Sale Authorized by the Patent Holder17-47
    • § 17:4.8 : Authorized Sale Exhausts the Patent Rights17-48
    • § 17:4.9 : What Quanta Means to Practitioners17-49
      • [A] : The Contracts and Conditions in Quanta17-49
      • [B] : Restrictions or Conditions Should Be in the License Agreement17-50
      • [C] : Are Restrictions and Conditions Still Allowed?17-51
      • [D] : What Conditions or Restrictions Are Available?17-52
      • [E] : Reasons for Restricted Licenses17-53
      • [F] : Restrictions in Practice17-53
      • [G] : Separately Licensing Consumers17-54
      • [H] : Digital Rights Management17-54
      • [I] : License but Do Not Sell (Software Model)17-55
      • [J] : Higher Up-Front Royalties17-55
      • [K] : Confirmation That Purchaser Is Separately Licensed17-55
      • [L] : Termination of License Grant for Breach17-56
      • [M] : When Does a Sale Exhaust the Patent?17-56
      • [N] : Is It Helpful to State Whether Licensed Products “Substantially Embody” the Licensed Patent?17-57
      • [O] : Implied License Distinguished from Patent Exhaustion17-58
      • [P] : Effect on Downstream “Infringers”17-58
      • [Q] : Contract Remedies17-58
        • [Q][1] : Patentee May Enforce Additional Restrictions by Contract17-58
        • [Q][2] : Privity of Contract17-59
      • [R] : Importance of Selecting Licensees17-60
      • [S] : How Can a Purchaser Protect Itself?17-60
      • [T] : Restrictions in Biopharma Industry17-60
      • [U] : Conclusion: Quanta in a (Very Small) Nutshell17-61
  • § 17:5 : Cases Construing Quanta17-61
    • § 17:5.1 : TransCore, LP v. Electronic Transaction Consultants Corp.17-61
      • [A] : Facts17-61
      • [B] : Holding17-63
      • [C] : Federal Circuit’s Analysis17-63
        • [C][1] : Effect of the Release17-66
        • [C][2] : Effect of Legal Estoppel17-66
      • [D] : Practice Points17-68
      • [E] : Does a Covenant Not to Sue Equal a License?17-69
    • § 17:5.2 : LG Electronics, Inc. v. Hitachi, Ltd.17-69
      • [A] : Facts17-69
      • [B] : Decision17-73
        • [B][1] : Substantial Embodiment17-74
          • [B][1][a] : Four “Exemplary Inventive Aspects”17-75
        • [B][2] : Foreign Sales17-77
        • [B][3] : Location of the Relevant Sales17-82
      • [C] : Conclusion17-83
    • § 17:5.3 : Fujifilm Corp. v. Benun17-83
    • § 17:5.4 : Static Control Components v. Lexmark International, Inc.17-84
      • [A] : Facts17-84
      • [B] : Interpretation of Quanta17-85
      • [C] : Consideration of LG Electronics, Inc. v. Hitachi, Ltd.17-88
      • [D] : Conclusion: Quanta Has Changed the Game17-89
  • § 17:6 : Risks of Declaratory Judgments from Selling Patents17-89
    • § 17:6.1 : The Increasing Popularity of Selling Patents17-89
    • § 17:6.2 : Absence of Case Law17-90
    • § 17:6.3 : Catalyst Corporate Federal Credit Union17-90
    • § 17:6.4 : Limelight Networks17-92
      • [A] : The Email17-93
      • [B] : Online Presentation and Website17-94
      • [C] : Statements Concerning Limelight’s Competitors17-96
      • [D] : Demand for Payment17-97
      • [E] : Promoting Third Parties to Assert Patent Infringement17-97
  • Examples :17 EX-1
  • Appendix 17A : Complaint, Catalyst Corporate Fed. Credit Union v. IP Navigation Grp., LLC (E.D. Tex. 2012)App. 17A-1
  • Appendix 17B : Complaint, Limelight Networks, Inc. v. Allied Security Trust (D. Ariz. 2011)App. 17B-1
  • Appendix 17C : Complaint, iLeverage Inc. v. Limelight Networks, Inc. (Cal. Super. Ct. 2011)App. 17C-1
  • Appendix 17D : Declaration of Dion Messer in Support of Defendant Limelight Networks, Inc.’s Special Motion to Strike the Complaint (C.C.P. § 425.16), iLeverage Inc. v. Limelight Networks, Inc. (Cal. Super. Ct. 2011)App. 17D-1
  • Appendix 17E : Order Granting Defendant Limelight Networks, Inc.’s Special Motion to Strike the Complaint (CCP § 425.16), iLeverage Inc. v. Limelight Networks, Inc. (Cal. Super. Ct. 2011)App. 17E-1
Chapter 18: Table of Examples
Chapter 19: Table of Authorities
Chapter 20: Index to Patent Licensing

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