PATENT / KNOW-HOW LICENSE AGREEMENTS

Transcription

PATENT / KNOW-HOW LICENSE AGREEMENTS
patent / know-how
license agreements
US Business FOLIO
There is virtually no limit to the range of deal terms that can be found in patent/know-how license agreements. The negotiated terms are
tailored to the specifics of the deal and depend on many factors, including the nature and stage of the technology and the leverage of the
parties. Typical terms to consider include:
The Parties
ŒŒNames and addresses of Licensor and Licensee
Definitions
ŒŒAffiliate
ŒŒConfidential Information
ŒŒEffective Date
ŒŒField of Use
ŒŒImprovements
ŒŒLicensed Know-How
ŒŒLicensed Patent Rights
ŒŒNet Sales (may include Combination Product calculation)
ŒŒProducts and/or Services
ŒŒSublicense Revenue
ŒŒTerm
ŒŒTerritory
ŒŒValid Claim
License Grant
ŒŒLicense granted under Licensed Patent Rights and/or Licensed Know-How
to make, have made, use, sell and import Products and/or Services in the
Field of Use and Territory
ŒŒMay be exclusive, co-exclusive or non-exclusive
ŒŒMay involve cross-license between both parties
ŒŒIs license granted to Affiliates?
ŒŒDoes Licensee have right to sublicense? (see Sublicense Issues below)
ŒŒIs license subject to rights of United States Government?
ŒŒAre there any rights retained (e.g. university research)?
ŒŒWill license include rights to Improvements made by Licensor?
ŒŒWill Licensee be obligated to grant-back Improvements to Licensor?
ŒŒMay grant option or right of first refusal to related IP and/or use in other
fields
ŒŒTransfer of Know-How and materials or other technology
Sublicense Issues
ŒŒWith or without consent of Licensor?
ŒŒDoes sublicense survive termination of license?
ŒŒHave required consents been obtained?
Consideration
ŒŒUp-front license fee
ŒŒAnnual license fee/minimum royalty
ŒŒRoyalties on Net Sales (see below)
ŒŒProfit share
ŒŒPayments on achievement of development and/or commercialization
milestones
ŒŒPercentage of Sublicense Revenue
ŒŒSettlement of dispute or litigation
ŒŒCross license
ŒŒEquity
ŒŒReimbursement of patent prosecution expenses
ŒŒCurrency of payments/exchange rate
ŒŒTaxes
ŒŒInterest on overdue amounts
ŒŒPatent expenses
Royalties on Net Sales
ŒŒMay be tiered based on Net Sales thresholds
ŒŒMay be subject to reduction:
ŒŒif royalties also due to third parties (anti-stacking)
ŒŒif competing products
ŒŒif no patent coverage
ŒŒMay pass through to sublicensees
ŒŒDuration of payment obligation (may raise patent misuse issue in US)
Duties of Licensee
ŒŒUse commercially reasonable efforts to exploit Licensed Patent Rights
and/or meet specific time based diligence milestones
ŒŒProvide periodic progress or status reports
ŒŒProvide periodic financial reports, including royalty calculation
ŒŒMake records of account available for audit
Prosecution/Infringement
ŒŒWhich party will prosecute Licensed Patent Rights? Which party will pay
costs?
ŒŒWhich party will pursue and pay for third-party infringers of Licensed
Patent Rights?
ŒŒWhich party will defend and pay for third-party claims of infringement?
ŒŒSettlement restrictions
ŒŒHow will recoveries be allocated?
ŒŒAgreement to be joined as a party if necessary
Indemnification
ŒŒBy Licensor
ŒŒBy Licensee
ŒŒLicensee obligation to maintain insurance
ŒŒLimitation of Liability
Confidential Information
ŒŒRestrictions on use and disclosure by recipient
ŒŒExceptions
ŒŒDuration of obligation
Term and Termination
ŒŒExpiration
ŒŒTermination for Material Breach
ŒŒTermination for Failure to Meet Diligence (or conversion to non-exclusive)
ŒŒTermination by Mutual Consent
ŒŒTermination by Licensee for Convenience
ŒŒEffect of Termination
ŒŒEffect of Bankruptcy
ŒŒSurvival of Obligations
Representations and Warranties
ŒŒParties have right and authority to execute agreement
ŒŒNo conflict with other obligations
ŒŒLicensor owns or controls licensed rights
ŒŒQualified representations regarding validity, enforceability and non-infringement of third-party rights
ŒŒDisclaimer of warranties
Assignment of Agreement
ŒŒWith consent
ŒŒIn event of sale of business or merger or other change of control
Miscellaneous
ŒŒPublicity/Use of Name
ŒŒArbitration or other dispute resolution
ŒŒGoverning law
ŒŒForce Majeure
ŒŒPatent marking
ŒŒNotices
ŒŒIntegration
life sciences collaboration
agreements
Why Collaborate?
ŒŒGain access to technology, expertise and specialized resources
ŒŒGain license to patent or other rights that would otherwise be infringed
or unavailable
ŒŒObtain research funding and/or capital
ŒŒLeverage the resources of each party to create new value
ŒŒRight to develop and commercialize the technology created in the
collaboration
ŒŒExpand experience
ŒŒGenerate publicity - serves as validation of technology and raises profile
Parties’ Possible Contributions to the
Collaboration
ŒŒFunding and/or capital
ŒŒIntellectual property rights
ŒŒConfidential information, know-how, data or methodologies
ŒŒSpecialized personnel
ŒŒExperience (e.g., manufacturing, regulatory and sales and marketing
expertise)
ŒŒUnique resources
ŒŒBiological, chemical or other materials
ŒŒPlatform or tool technology
ŒŒEquipment
ŒŒSoftware
ŒŒGlobal distribution network
Ownership of Intellectual Property Created in
Collaboration
ŒŒAllocation of ownership of IP created in collaboration depends on many
factors
ŒŒNew IP may be owned by inventing party or by field [if both parties in-
vented, new IP may be jointly owned (see below)]
ŒŒNew IP that is an improvement to existing IP may be assigned to party that
owns existing IP, regardless of inventorship
ŒŒMay allocate ownership based on inventorship for some IP based on existing background rights for other IP
ŒŒWhat constitutes existing IP and collaboration IP needs to be clearly defined. Generally, each party retains ownership of its existing IP.
Rights Granted
ŒŒParties grant exclusive, co-exclusive or non-exclusive licenses to each
other under existing IP and collaboration IP as necessary to further collaboration goals
ŒŒRights to research tools may be non-exclusive
ŒŒMay be field limited - how are rights outside field handled? May be
territory-limited.
ŒŒAbility to sublicense?
ŒŒMay have co-promotion or co-marketing rights in specified territory(ies)
Joint Ownership Issues
ŒŒCollaboration may lead to joint inventorship under patent laws or joint
ownership under agreement
ŒŒIn U.S., each joint owner has an undivided interest in patent and may
l­icense and exploit the patent without consent and without accounting to
other owner
ŒŒNot the case in some jurisdictions/countries - may need consent for license
ŒŒEach joint owner may sue infringers, other owner may be indispensable
co-plaintiff
ŒŒNeed to consider rights of joint owners upon termination
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ATTORNEY ADVERTISING. Prior results do not guarantee a similar outcome.
Obligations of Parties
ŒŒUse commercially reasonable efforts to perform required activities
ŒŒProvide necessary cooperation and resources
ŒŒMake payments
ŒŒRefrain from selling competing products, subject to antitrust considerations
ŒŒSpecify which party will perform research, conduct clinical trials, manu-
facture, obtain regulatory approvals and commercialize (may be territory
by territory)
ŒŒPrompt disclosure of inventions
ŒŒAdhere to confidentiality obligations
ŒŒEstablish governance structure, such as Steering Committee, and mechanism to resolve disputes
ŒŒComply with restrictions on use of materials
ŒŒEnsure any required consents from third-party licensors of existing IP have
been obtained
ŒŒEnsure any required terms of such third-party agreements have been
passed through to the collaboration
ŒŒEffect of termination of third-party agreements
ŒŒOften multi-year relationship - parties’ interests must be aligned
Financial Terms
ŒŒMay share profits and costs
ŒŒMay be royalty based
ŒŒMay be combination of profit share and royalties
ŒŒMay include upfront and/or milestone payments
ŒŒMay include research funding and/or capital
ŒŒReimbursement of patent expenses
ŒŒPayments to third parties
ŒŒTaxes
Patent Prosecution/Infringement
ŒŒWhich party will prosecute collaboration patent rights?
ŒŒWhich party will pursue infringers?
ŒŒWhich party will defend against third-party claims of infringement, invalidity or unenforceability?
ŒŒAllocation of costs and payments from litigation
Termination
ŒŒExpiration
ŒŒTermination for Material Breach
ŒŒTermination for Convenience
ŒŒTermination by Mutual Consent
ŒŒBankruptcy
ŒŒEffect on IP rights (e.g., if a party opts out of the collaboration or ­breaches,
license granted to the other party may continue)
ŒŒEffect on financial terms
ŒŒEffect on regulatory approvals
Miscellaneous
ŒŒRepresentations and Warranties
ŒŒIndemnification/Insurance
ŒŒDispute Resolution
ŒŒAssignment/Change of Control
ŒŒForce Majeure
ŒŒPublicity/Use of Name
ŒŒNotices
ŒŒGoverning Law
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