Treatise Update: Patent Licensing and Selling

Patent Licensing and Selling (Second Edition) offers complete and practical guidance for drafting, reviewing, and negotiating solid patent license agreements. Whether representing licensors of licensees, readers learn how to draft fair and litigation-free patent license and patent purchase agreements that serve clients’ interests, satisfy other parties, and shield clients from legal exposure.

Author Mark Holmes has revised and expanded the text and added useful new commentary on the following:

  • Licensee’s right to independent development: Licensors might wish to temper their granting of independent development rights with the condition that the licensee not diminish its efforts to market and sell the licensor’s products. See new § 2:11.
  • Compulsory licenses: Licensees that have already entered into license agreements with the patent owner will want to make sure that, if compulsory licensing is invoked, they are not paying a royalty rate higher than the compulsory rate. See new § 4:11.
  • Maintenance and prosecution costs: The license agreement might require the licensee to pay prosecution and maintenance fees. What if the licensor can dictate in which countries patents will be prosecuted and maintained? What is to protect the licensee from being forced to pay for prosecution and maintenance in countries in which there is likely little commercial interest in licensed products? See new § 6:3 for a discussion of how a licensee can protect itself from such perceived licensor abuse.
  • Indemnification by statute: In some states, if the license agreement is silent on indemnification, the issue may be addressed by statute, but the statutory obligation can be broad. See §§ 8:3.1 to 8:4 for a discussion of this important topic.
  • Arbitrator discretion: If you seek to limit discovery in an arbitration, beware of language that allows the arbitrator to deviate from the precisely stated limitations of discovery. See new § 14:9.1.
  • Force majeure: For a discussion of force majeure in the age of COVID-19, see § 15:10.2.
  • New contract provisions: This release includes the following new provisions for possible inclusion in a license agreement: Examples 1:69 and 1:69A (Construction and Rules of construction); Example 1:136 (Force majeure carveout); Example 1:318A (Valid patent claim); Example 2:21B (Right to develop independently); Example 3:16 (Patent family); Example 4:50 (Compulsory license royalty); Example 6:8 (Licensee responsible for maintenance and prosecution; loses rights where turns prosecution and maintenance over to licensor); Example 6:27 (Patent markings indemnification); Example 6:43 (Patent markings not an admission); Examples 8:5 and 8:5A (Disclaimer of warranties); and Example 18:1 (Seller patent marking compliance).

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