Posts Tagged: "exclusive license"

NASA will enter into a range of different patent license agreements from no-cost evaluation licenses up to exclusive license. The agency’s goal in licensing technologies is to reach the widest distribution possible for the commercialized technology. To some, it may seem unusual that exclusive licenses would be part of NASA’s licensing options if the goal was truly the widest distribution possible. “We’ll only grant an exclusive license if we believe that exclusivity leads to the widest distribution,” Lockney said, noting that there were a couple of examples where such a situation could play out. An exclusive license for the broadest possible distribution could make sense if the technology was being commercialized in a medical device and a single multinational company offers an incredibly broad distribution model; such was the case with a flexible insulating plastic material for use with pacemaker wires recently licensed by NASA with Medtronic. In other situations where multiple companies occupy the same market, NASA might grant an exclusive license to one company if it’s determined that, without the exclusivity, none of the firms could invest adequately in commercializing the technology.

U.S. District Judge Jon McCalla of the Western District of Tennessee recently issued an order denying motions made by interactive streaming music provider Spotify to dismiss a case including copyright infringement claims brought by independent music publisher and copyright administration company Bluewater Music Corporation. Judge McCalla’s order determined Bluewater has standing for all 2,142 music compositions it has asserted based on ownership or an exclusive license of the works. Given Bluewater is seeking the maximum statutory damages of $150,000 per infringed work, Judge McCalla’s order allows Bluewater to continue pursuing a maximum damages award of $321.3 million.

On Friday, January 19th, a magistrate judge in the District of Delaware entered a memorandum opinion ordering Cornell University to enter into arbitration proceedings to resolve a dispute with licensee Life Technologies Corporation. The dispute arises out of a patent infringement case in which both parties are plaintiffs after Cornell felt that it was fraudulently induced into a settlement agreement with Life Technologies and Illumina, Inc., the defendant in the case.

Concerns about the ability of academic institutions to keep contributing to the U.S. innovation economy go well beyond federal funding stagnation according to the recent AUTM survey. In an executive summary section entitled The Perils of Eroding Patent Rights, AUTM notes that a slight decrease in options and exclusive license agreements compared to the number of non-exclusive license agreements could be due to fears that licensing companies have over protecting the intellectual property under the current iteration of the U.S. patent system. In 2016, option agreements were down year-over-year by 7 percent while exclusive licenses dropped 2.1 percent. Non-exclusive license totals, however, rose by 2.1 percent to 4,201 such license agreements in 2016. A sharp increase in startups ceasing business activity, up 37.4 percent to a total of 331 such startups, is another “ominous trend” which AUTM notes is likely attributable to eroding patent rights.

We’ve learned from experience that just because a theory’s off base doesn’t mean it won’t take root, particularly when it involves patents and medicine. “No Vaccines Before the Next Zika Outbreak?: A Case for IP Preparedness”  by Professor Ana Santos Rutshman, a faculty fellow in Health Law and Intellectual Property at DePaul University, Co-Director of the Global Healthcare Innovation Alliances at Duke University, and consultant to the World Health Organization, previews  her upcoming UCLA law review article. It could be titled “Developing Treatments Without Patents: Let’s Give it a Try.” The article blames exclusive licensing for the lack of a Zika vaccine citing the failed deal between the Department of the Army and Sanofi. The remedy: banning exclusive licensing for federally supported inventions related to specific diseases while imposing price controls on other life science discoveries. Before this bandwagon rolls, let’s look at the quality of its construction.

Patents are a big capital investment for a startup company, but so is an office building. However, no startup company owns their office building outright. Even if they did own the building, they would take a mortgage on the building to free up capital. Exclusive licenses are the same thing as a lease agreement: the startup has full control of the assets, but does not have to spend capital to build or maintain the asset.

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.

I present ten scenarios for dealing with what is usually the most contested issue in pre-collaboration agreement negotiations – the ownership of foreground IP. These scenarios range from preferably avoiding joint IP ownership altogether to more complex situations involving joint IP ownership with both nonexclusive and exclusives licenses, as well as nonexclusive and exclusive cross-licenses, and even scenarios based on defining the parties’ respective fields of endeavor.

Over the course of several amendments, Disney granted increasing rights to Candella, by which Disney specifically intended to give Candella standing to sue for patent infringement. The court held that the rights retained by Disney were not “substantial rights” sufficient to deprive Candella of standing, because Disney did not retain a right to exclude. Disney merely had a financial interest in any enforcement efforts by Candella. Thus, Candella did not have to join Disney to maintain the lawsuit.