Chapter 20 covers issues relating to the licensing of patents in the context of technical standard setting. It briefly summarizes the development of standards-development organizations (SDOs) and their policies regarding patents on standards. It then addresses the issue of determining fair, reasonable and nondiscriminatory royalty rates, which are required by many SDO patent policies. It also covers patent disclosure requirements under SDO policies (Qualcomm v. Broadcom) and the contours of the nondiscrimination prong of FRAND. Next it addresses the effect of a FRAND commitment on the ability of parties to seek injunctive relief (Apple v. Motorola), and then the effect of the transfer of an underlying patent on the FRAND commitment made by its prior owner.

Chapter 3 covers theoretical issues surrounding the nature of a “license” of IP and how it compares to similar rights of usage in the context of real and personal property. It considers whether, as some courts have held, a license is a covenant not to sue, or a property right with more substantial ties to the underlying IP rights. It next addresses the law governing IP transactions, including state contract law, property law, the Uniform Commercial Code and federal common law. It concludes with a discussion of the effects of transfers of IP on underlying license rights.

Chapter 5 address precursors to the drafting and negotiation of an IP agreement, including term sheets, letters of intent and confidentially agreements. Attention is given to the effect of initial licensing overtures on declaratory judgment jurisdiction (Sandisk v. STMicroelectronics). The provisions of mutual confidentiality and nondisclosure agreements are discussed in detail, along with cases analyzing these agreements (Celeritas v. Rockwell).

Chapter 14 covers legal issues arising in the context of academic research and technology transfer. A brief history of university technology development and the Bayh-Dole Act of 1980 are given, followed by a discussion of various issues that have arisen under the Act. The Act’s effect on ownership of IP is discussed with reference to Stanford v. Roche (2011). Its requirements for royalty sharing and US manufacturing are discussed. The area of march-in rights is illustrated through the dispute over Fabryzyme. Next focus shifts to the role of university technology transfer offices (TTOs) and ways that universities have attempted to shape university technology transfer over the years, including through the 2007 Nine Points document and the highlighting of issues such as reserved rights, limits on exclusivity, socially-responsible licensing and price controls. Next, other forms of university technology development agreement are discussed, including sponsored research and materials transfer agreements. The chapter concludes with a discussion of university policies relating to copyright.

Chapter 8 deals with the financial terms of licensing agreements, including fixed/up-front/lump sum payments, running royalties, sublicensing income, milestone payments (Law v. BioHeart), equity compensation, cost reimbursement (including for patent prosecution), most-favored clauses (Kohle v. Hercules) and audit clauses. Special attention is given to the calculation of license royalty rates, including tiered royalties, the royalty base (Allen Archerty v. Precision Shooting), the entire market value rule (EMVR), the smallest-salable patent practicing unit (SSPPU) rule, now-disfavored rules of thumb such as the 25% rule, standard exclusions from royalty calculations, minimum royalties, royalty caps, royalty stacking clauses and escalation clauses (Arbitron v. Tralyn Broadcasting). Special issues such as reach-through royalties and package royalties are also addressed.

Chapter 23 begins with the origins of the copyright first sale doctrine (Bobbs-Merrill v. Straus), then explores this concept in the context of software licensing and sales (Vernor v. Autodesk). It next extends these principles to trademark licenses (Au-Tomotive Gold v. Volkswagen). Next, it addresses the complex history of patent exhaustion (Adams v. Burke, Qunta v. LG). The issue of conditional sales and their continuing validity is explored through Impression Products v. Lexmark, which also features in the discussion of international exhaustion. International copyright exhaustion is discussed in view of Kirtsaeng v. John Wiley. The chapter concludes with a discussion of international trademark exhaustion and gray market goods, exemplified by Nestle v. Casa Helvetia).

Chapter 12 relates to the duration, term and renewal of IP licenses and licensing agreements. Distinctions are made between term limited, perpetual and irrevocable licenses and obligations (Warner-Lambert vs. John J. Reynolds). Different events of termination are described, including termination for convenience and for cause. Attention is given to the different parameters surrounding breach of contract, including materiality, notice, cure and excuse, and escrow of disputed sums. Statutory termination rights under copyright law are also addressed. Finally, the effects of termination and survival of particular contractual clauses are discussed, including transition assistance, assignment of sublicenses and transitional licenses.

Chapter 21 covers the effect of bankruptcy and insovency laws on IP licensing transactions. It covers the automatic stay of proceedings (US v. Inslaw), what is included in the bankruptcy estate, the effect of bankruptcy on executory contracts, including Lubrizol and Section 365(n) of the Bankruptcy Code (Prize Frize), the assignment by the bankruptcy estate (Pioneer Ford), the ban on ipso facto clauses and the use of technology escrow agreements to avoid some of these issues.

Chapter 1 presents an overview of the IP licensing industry and covers the business assumptions and goals of IP transactions, including market and geographic expansion, modularization, monetization, rights aggregation and platform leadership.

Chapter 9 explores the many situations in which new IP is developed under a licensing or other agreement, and how that IP is owned and licensed. Attention is given both to licensee developments (improvements and derivative works of licensed rights), which may be subject to grantback and license-back arrangements (Kennedy v. NJDA) and new IP developed by a licensor under a services arrangement (e.g., commissioned works, customizations) (IXL v. AdOutlet) and the incorporation of third party components in developed technologies. The chapter also addresses the complex issues that arise from joint development of IP, including treatment of foreground, background and sideground IP, and how IP is used in the context of joint ventures (Pav-Saver v. Vasso). The chapter concludes with a discussion of the allocation of responsibility for IP management, maintenance and prosecution.

Chapter 2 covers issues surrounding the assignment of IP (i.e., fixing its ownership as a prerequisite to transacting in it), and contrasts ownership with licensing of IP. It specifically covers the assignment of rights in patents, copyrights, trademarks and trade secrets, including within the employment context (i.e., shop rights , individuals hired to invent and works made for hire). The Supreme Court decision in Stanford v. Roche is considered at length. The chapter concludes with a thorough discussion of the issues presented by joint ownership of IP.

Chapter 16 covers a range of topics related to music licensing. It first summarizes the complex copyright rules surrounding musical compositions and performances, as well as the compulsory licensing regime for mechanical reproductions and the Copyright Royalty Board (RIAA v. Librarian of Cong.). It describes the collective performing rights organizations (PRO) such as ASCAP and BMI, as well as recent market changes introduced by digital transmission. The chapter next addresses the licensing of musical performances, both analog and digital (Arista Records v. Launch Media), with reference to the 2018 Music Modernization Act. The chapter next covers synchronization and master recording rights that are needed when music is paired with video. The issue of music sampling is next addressed, posing questions relating to the feasibility of the current music licensing system in the face of widespread sampling.

Chapter 13 discusses numerous contractual clauses that are often relegated to the “back” of an agreement, but which can have important effects on the parties. These include the front matter of the agreement, definitions, assignment (PPG v. Guardian), marking, compliance with law, force majeure, merger and entire agreement, no waiver, severability, precedence, amendment, mutual negotiation, notices and interpretation.

Chapter 10 focuses on representatations and warranties made by parties in IP agreements, as well as liability-allocation mechanisms such as indemnification. The chapter begins by discussing warranties of title (Loew’s v. Wolff) and general “corporate” warranties, then addresses warranties relating to performance (including malicious computer code) and remedial procedures. Disclaimers, exclusions from liabilty for consequential and indirect damages, and limitations of liability are also addressed. the chapter next discusses IP indemnification clauses, including a detailed analysis of the drafting and negotiation of such clauses (So. Cal. Gas v. Syntellect). It concludes with a discussion of insurance requirements and clauses.

Chapter 24 addresses the misuse of IP as an offense separate from antitrust law (despite its origins in antitrust principles). It begins with Morton Salt v. Suppiger, which established the patent misuse doctrine in 1917. It then examines misuse by tying in detail, including Mercoid v. Minneapolis-Honeywell and the subsequent misuse amendments to the Patent Act. It next moves to misuse by term expansion and the Supreme Court’s decision in Brulotte v. Thys, as most recently affirmed in Kimble v. Marvel. It next addresses potential patent misuse through bundling and the cases involving Hazeltine. The chapter concludes with the expansion of the misuse doctrine to copyright (Lasercomb v. Reynolds).