• Mixture of languages
• Desire to avoid ambiguity
• Habit
• Pressure to conform
Examples of Unusual Language
• Doublets and Triplets
• Deeming
V. Noscitur a sociis
Principles of Contract Interpretation
Facts about:
• Relationship and goals of the parties
• Nature of the transaction
• Other related transactional documents
Exclusive:
“Intellectual property” means patents, copyrights,
and trademarks.
Signature Block
The Parties agree to the terms of this
Agreement above.
Licensor Licensee
• Covenants
• Conditions Precedent
• Remedies
Example:
Four types
– Termination
– Acceleration
– Indemnification
– Liquidated Damages
Remedy: Termination
“In the event Operator defaults in the
performance of any covenant or agreement
made hereunder, as to payments of amounts
due hereunder or otherwise, and such defaults
are not remedied to the Supplier’s satisfaction
within ten (10) days after notice of such defaults,
the Supplier may thereupon terminate this
agreement and all rights hereunder of the
Operator but such termination shall not affect the
obligations of the Operator to take action or
abstain from taking action after termination
hereof, in accordance with this agreement.”
Remedy: Acceleration
“Whenever, within the sole judgment of
Seller, the credit standing of Buyer shall
become impaired, Seller shall have the
right to demand that the remaining portion
of the contract be fully performed within
ten (10) days.”
Remedy: Indemnification
• Breaching party indemnifies (pays back)
innocent party for all costs, damages and
losses suffered as a result of the breach
Reasonable Efforts
Stronger
Diligent Efforts
Best Efforts
6. Boilerplate Provisions
What does “boilerplate” mean?
• Miscellaneous
• Pre-litigation planning
• NOT unimportant!
Arbitration
• Why go to arbitration?
Example Clause:
“Any controversy or claim arising out of or relating
to this Agreement, or its breach, is to be settled
by arbitration administered by [organization] in
accordance with its [subject matter] Rules.”
• Arbitration or Mediation?
Choice of Law
• ALWAYS include this provision
• Which law should you choose?
Example:
“This Agreement and the rights and obligations of
the parties hereunder shall be governed by, and
construed and interpreted in accordance with,
the laws of the State of New York, without regard
to its choice of laws principles.”
Consent to Jurisdiction
• Choice of forum provision
Example:
“Each party shall submit to any court of
competent jurisdiction for purposes of the
enforcement of any award, order or judgment.
Any award, order or judgment pursuant to
arbitration is final and may be entered and
enforced in any court of competent jurisdiction.”
Waiver to Trial by Jury
• Why waive the right to a jury?
Example:
“The descriptive headings of the Articles,
Sections and subsections of this
Agreement are for convenience only, do
not constitute a part of this Agreement,
and do not affect this Agreement’s
construction or interpretation.”
Severability
• Remove (sever) void provision and
interpret the remainder
Example:
“The parties may amend this Agreement
only by a written agreement, signed by the
parties, that identifies itself as an
amendment to this Agreement.”
Assignment and Delegation
• Assignment of rights or delegation of
duties to a third party
Example:
“The parties agree to do such further acts and
things and to execute and deliver such
additional agreements and instruments as may
be reasonably necessary to give effect to the
purposes of this Agreement and the parties’
agreements hereunder.”
7. Patent Licensing
• What is a license?
• Types of Licenses
– Exclusive License
– Non-Exclusive License
– Paid-Up License
– Running Royalty License
– Cross License
Structure of a License Agreement
• Title
• Introductory Paragraph
• Preamble / Recitals
• Definitions
• Grant
• Royalties
• Representations and Warranties
• Term and Termination
• Boilerplate provisions
• Signature Block
Definitions
• Licensed Patents
• Licensed Products
• Territory
Patent Marking
• Why is marking important?
• Licensee’s Improvement
– Can Licensor use it? If so, to what extent?
– If patentable, who gets the new patent?
Indemnification
• Licensor may want to be indemnified
against tort actions in relation to use of the
final product