IP Essentials: Q&A Series

Q How is a license agreement terminated? A Always be mindful of termination clauses in patent license agreements. Sometimes patent families can last longer than expected due to patent term adjustment, foreign rights, or continuation applications. Clear termination clauses (such as defining the termination date, termination conditions, territory, and exact rights to be terminated) can resolve any potential disputes at the outset of the agreement. Q Are there alternatives to litigation? A Patent disputes can be expensive, and when a patent license agreement breaks down, the resulting litigation may look a lot like a patent infringement dispute. Take the opportunity in your license agreements to find ways to reduce costs and fees for dispute resolution ahead of time. If possible, agree in advance to a forum. Consider including an attorneys’ fees provision. Finally, consider alternative dispute resolution options, such as binding arbitration, minitrial, or mediation.

assignment and sub-licensing clauses in their license agreements. Q What is licensee estoppel? A Sometimes licensors seek to preclude licensees from challenging the validity of the patent rights as a condition of licensing. In some circumstances this practice may no longer be permitted. Q What is “marking”? A Licensors should pay particular attention to patent “marking” requirements in patent license agreements. Under the law, patent owners are required to mark any products covered by the licensed patent(s) with the patent number(s). These marking requirements apply equally when a licensee makes a covered product pursuant to a license agreement; this often presents challenges when crafting a license agreement in the context of litigation settlement.

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