Copyright, Brain League IP Services, 2009 Now BananaIP. Non-commercial use is permitted.

Important Agreements and Negotiation Strategies

For Start Ups

Dr. Kalyan C. Kankanalakalyan@bananaip.com

91-80-26860414www.bananaip.com

Blog: www.sinapseblog.com

• Non-Disclosure Agreement

Clauses• Confidential Information• Permitted Purpose• Scope of Disclosure

• Purpose• Parties• Legal Instruments

• Term • Survival• Remedies• Other clauses

• Employment Agreement

Clauses• Intellectual Property• Ownership

• General• Specific

• Transfer• Documentation and Support• Third Party IP• Confidentiality• Non-competition• Non-solicitation• Moon-lighting

• Patent Agreements

Transfer of Patents

• Assignment

• License

Assignment

• Transfer of Ownership

• Partial or Complete

• Writing and Signature

• Register

License

• Authorization or Permission

• Exclusive Rights

• Territory

• Writing

• Signature

• Register

Types of Licenses

• Exclusive

• Non-exclusive

• Sole

Important clauses

• Recitals

• Definitions

• Grant

• Royalties

• Term and Termination

Recitals

• Parties

– Licensor/Licensee

• Addresses

• Dates

• Background of the transaction

Definitions

• Interpretation clause• Consistently used words– Specific/certain/lucid

• Attribute specific meaning• Apply to entire agreement

Examples• Licensor shall mean ABC company having a place of

business in Bangalore and shall include its subsidiaries, assignees and legal representatives.

• Licensee shall mean Kalyan, resident of xyz, Bangalore and shall include his successors, assignees, administrators, executors and other legal representatives.

• Licensed Patent shall mean patents granted in USA under patent numbers xxx, yyy and patent applications pending before Indian Patent Office having filing numbers xxx, and YYY.

Grant Clause

• Most important• Defines scope of agreement• States

– Parties– Type– Subject– Rights– Territory– Term

Example• Licensor grants to Licensee a nonexclusive license

to use the Licensed Software within the territory of India from 1st January, 2005 to 1st January, 2006.

• This clause specifies – Who grants to whom -Licensor to Licensee.– Type of license - Nonexclusive License– Rights – Use Licensed Software– Territory - India– Dates - January, 2005 to 1st January, 2006

Term and Termination

• Term• Events

– Material Breach - Nonpayment of royalty, etc.– Bankruptcy– Insolvency– Act of god

• Rights after termination• Confidentiality

Example

• Unless earlier terminated as hereinafter provided, this Agreement shall extend to each country in the Territory for a term of ten (10) years from the Effective Date. The term of the agreement is renewable at the option of the parties and such term and conditions shall be finalized after negotiations based on terms agreeable to both the parties.

Royalty Clause

• Type of Royalty– Lump sum royalty– Fixed Royalty– Running royalty

• Combination.• Mode and Date of payment• Accounting and Record keeping• Non payment consequences.

Example

• XYZ agrees to pay ABC, a fixed royalty of Twenty-Thousand-Dollars ($ 20,000) per every Calendar Year after the first year. For the first Calendar Year, XYZ shall pay ABC a fixed royalty of Ten-Thousand Dollars ($ 10,000). Such sum shall be paid on or before December 11th of every Calendar Year.

Other Clauses

• Indemnity

• Warranty

• Liability

NRDC V. ABS

• Patent License

• Not registered

• Expiry of patent term

• License invalid

• Other Agreements

Clauses

• Intellectual Property– Pre-existing IP– Ownership– Transfer and Documentation– Inventorship– Third Party IP– Warranty and Indemnity

• Confidentiality• Exclusivity and Non-Competition

Copyright, Brain League IP Services, 2009. Non-commercial use is permitted.

Any Questions, Comments or

Observations?