Posts Tagged: "Contracts 101"

Where a contractual assignment of patent rights is not unequivocal the contract cannot defeat standing at the pleadings stage in a correction of inventorship action. A contract between two legal entities cannot assign the patent rights of a non-party, when the non-party signed the agreement on behalf of one of the entities and not for himself. A contract to develop and deliver software, absent express language conveying an assignment, does not imply a transfer of patent rights and does not create an implication that the developer was hired to invent.

Esports is a truly global phenomenon, with some analysts estimating worldwide viewership at approximately 300 million, potentially rising to 500 million by 2020. With so many eyeballs on esports – and with so many of those eyeballs being in a millennial category that is young, affluent, globalized, and technologically-driven, but increasingly challenging for brands to engage with – esports presents an exciting opportunity for sponsors. And, as with any other sport, sponsorship can be a significant revenue generator for rights holders. But, intellectual property rights are complex in esports. When entering into an esports sponsorship arrangement, both rights holders (whether they be players, teams, tournament organizers or games publishers) and sponsors face many of the same issues that the parties to a deal in traditional sports do.

A Confidentiality Agreement, which is also known as non-disclosure agreement or simply as an NDA, is simply a contract between two or more parties where the subject of the agreement is a promise that information conveyed will be maintained in secrecy… These types of agreements are particularly useful when one is disclosing information that is valuable so long as secrecy is maintained (i.e., a trade secret), which can include both invention related information and business related information.

The art of preventive negotiation in a license agreement is not practiced solely by means of pen and paper (or word processor); but instead, starts much earlier. The care and attention devoted to the earliest stages of a deal are highly worthwhile. A friend and fellow LES member is fond of saying: “No deal without a meal.” This is emblematic of the fact that a license agreement is no more than an attempt to put in writing what the parties have agreed they are desirous of achieving, and how they propose allocating rights and responsibilities to achieve those ends. Trust is an essential component, and this is built up over time… The term sheet should be focused only on the major terms of consequence. It should not descend to tactics and operations or else it runs the risk of invading the rightful province of detailed negotiation and drafting of the agreement itself, and a needless redundancy. Tactical details are for later, when the investment is clearly justified. Likewise, premature focus on the tactical raises the risk that negotiation of the ultimate agreement becomes a rehash of the term sheet, which risks not only duplication of effort, but inconsistency, misunderstanding, and deviation from the strategic objectives underlying the alliance.

Inselberg and Interactive filed a motion to dismiss Bisignano and First Data’s declaratory judgment claims and state court counterclaims, and moved to remand the action to state court. The district court agreed, finding that it lacked jurisdiction over Inselberg and Interactive’s claims that the assignment agreement was invalid. Those claims were based on questions of state law and did not depend on any federal issues or interpretations of federal law. First Data’s invalidity and infringement counterclaims were deemed “incidental and contingent” to Inselberg and Interactive’s ownerships claims and could not be resolved unless or until a state court determined that Inselberg and Interactive owned the patents. First Data and Bisignano appealed the district court’s dismissal of its claims and its order to remand.

The basement inventor is increasingly rare, although I am old enough (and lucky enough) to know several. Invention in the “real world” is often a messy, team effort of multiple inventors, employers, contracts, research agreements, and funding agreements. As the complexity of invention multiplies, so do opportunities for unintentionally losing or jeopardizing intellectual property rights… There is often more than meets the eye when it comes to ownership of inventions. The benefits of collaboration far outweigh the disadvantages. However, you can take steps to ensure a smooth collaboration by keeping a few legal principles in mind…

There are not many things an employer can do to prevent unfettered competition by a former employee. B&P Section 16600 states that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” The statute provides three exceptions, none of which apply to the typical employer/employee relationship: (1) a person who sells the goodwill of a business or sells substantially all of its operating assets may lawfully agree to refrain from carrying on a similar business; (2) a partner may, upon the anticipation of the partnership dissolution or disassociation from the partnership, lawfully agree not to carry on a similar business; and (3) any member of a limited liability company may lawfully agree not to carry on a similar business.

ZeniMax offers useful insights for enterprises seeking to maximize the benefits of NDAs while minimizing the time and effort needed to negotiate them… Most technology enterprises are well-acquainted with NDAs. On the positive side, they recognize the importance of entering into NDAs with outside parties before disclosing confidential information, whether in the context of discussions related to potential commercial transactions, funding, or joint R&D projects, or for other purposes, such as to support product-related investigations or certification activities. On the negative side, enterprises commonly associate the negotiation of NDAs with cumbersome paperwork, obstacles, and delay.

One of the most egregious reasons that states make non-compete agreements (NCAs) unenforceable remains the broadness of the agreements that for all practical purposes bans an individual from pursuing her profession of choice. For example, enforceable NCAs cannot have language that calls for a separated employee to have to sit out her chosen industry for an excessive time, according to legal professionals. And NCAs must remain rational and have a rationale. “Most states will enforce restrictive covenants like NCAs so long as such agreements are reasonable in time, area and line of business,” says Micah J. Longo, employment lawyer, The Longo Firm, P.A.

In the past, employers typically only needed to be concerned that confidentiality and non-compete clauses in their employment agreements may be challenged either by departing employees who want to work for a competitor or by a competing company attempting to hire an employee or former employee. That tide is changing as an increasing level of government scrutiny has been directed at these employee restrictive covenants. Recently, federal and state agencies have been challenging the enforceability of confidentiality provisions and non-competes that the agencies claim are not supported by legitimate business interests. Given this change-in-tide and the New Year, now is the perfect time for employers to engage counsel to review their confidentiality and non-compete provisions.

Having an attorney draft a licensing agreement, or a licensing expert negotiate a licensing agreement, from start to finish is obviously the best way to proceed. But there will always be some who will choose to proceed on their own to negotiate a licensing and/or draft an agreement. This can certainly be dangerous, but sometimes there is no alternative given financial constraints. Whether you are going to represent yourself or work with an attorney or licensing professional, it is a worthwhile endeavor to engage in some strategic thinking, which absolutely must be the precursor to any memorialized deal.

The popular media’s reports of the demise of IP rights (especially patents) are premature and greatly exaggerated. IP remains valuable to enterprises of all sizes and types. Further, the notion of open innovation, which reflects not only the social nature of man but today’s technological reality, is here to stay. As a result, IP law practitioners will continue to be called draft, review and negotiate collaboration-type agreements where business, engineering and other legal personnel will continue to insist on the “fairness” of joint IP ownership. Such insistence should always be met with skepticism for its need. And, when such joint IP ownership is unavoidable, its consequences and mechanics must be addressed. In sum: If you must do it, don’t half-a$$ it!

It seems the since-kindergarten, ingrained notion of sharing supersedes our B.S., M.S., J.D., Ph.D. and/or M.B.A. training in this respect! Pressures to “get the deal done” by our business and engineering clients, as well as the corporate lawyers who may be supporting the deal and always think it’s a good idea, result in IP law practitioners’ capitulation into drafting joint IP ownership clauses. We should have learned long ago, however, that while splitting the baby (i.e., joint IP ownership in this case) may sound “fair” and give us psychological comfort, in reality it is usually undesirable, unwieldy and perhaps unworkable.

In a case located at the intersection of bankruptcy and IP law, the Third Circuit ruled that, under the terms of a contract, Walt Disney Studios Motion Picture Production and its affiliates did not acquire a perpetual worldwide license to use patents to convert conventional films into 3D.