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New Ideas, Methods and Products Series
Volume IV |
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Licensing/Technology Transfer
INTRODUCTION
A license is simply a special
form of contract
or agreement. Each party
promises to do or
pay something in return
for the other party
doing or paying something
too. Those contracts
that deal with transfer
of technology, or
more broadly, intellectual
property -- patents,
trade secrets, know-how,
copyrights, and
trademarks -- are generally
referred to as
licenses. The licensed
property can be anything
from the right to use Mickey
Mouse on "T"
shirts or to make copies
of the Star Wars
movie, to the right to
operate under the
McDonald's name or to use
a patented method
of making a microchip or
to reproduce, use
or sell a piece of software.
Software licenses
are just one of the many
types of licenses.
The basic considerations
are the same but
specific clauses and language
are tailored
to the software environment.
Basic to any licensing
activity is of course
a valuable property right
to be licensed.
Typically this is a patent,
copyright, trademark,
trade secret or know-how.
Before you plan
a licensing program, then,
you should understand
a little bit about each
one. For a better
understanding of the types
of protection
afforded by patents, trademarks,
copyrights
and trade secrets and how
to obtain that
protection, refer to primers
on those topics
written and published by
the same author:
"I. What's Protectable
by Patents, Copyrights,
Trademarks and Trade Secrets";
and "II.
How to Establish Rights
in Patents, Trade
Secrets, Trademarks and
Copyrights".
This primer explains the
nature and structure
of a license as well as
how to evaluate the
licensed property to set
a royalty. Other
primers in the series discuss:
what things
are protectable by patent,
trade secret,
trademark and copyright;
how to establish
rights in patents, trade
secrets, trademarks
and copyrights; international
protection;
employee contracts, confidential
disclosure
agreements, consultant
agreements and visitor
forms; infringement and
litigation; the formal
procedure for obtaining
patent, trademark
and copyright protection;
protecting and
licensing biotechnology;
trade dress: protection
for product appearance
beyond patent and
copyright; false advertising
-- what is and
isn't permissible; comparative
advertising
-- what can you say about
your competition;
software protection and
licensing; rights-in-data,
patents and copyrights
under SBIR and other
government contracts; tax
and bankruptcy
aspects of patents, trademarks,
copyrights
and trade secrets; and
from invention to
patent: the inventor's
role.
COMMON CONCERNS AND CLAUSES
Typically the term license
is used to refer
to a number of different
types of contracts
involving intellectual
property, including
primarily an assignment,
an exclusive license
and a non-exclusive license.
And that poetic
"license" will
continue here.
An assignment is an outright
sale of the
property. Title passes
from the owner, the
assignor, to the buyer,
the assignee. Assignments
can take a number of forms.
An assignment
can be of an entire patent
including all
the rights under the patent.
It can be an
undivided fractional portion
of all the patent
rights (i.e., 30% undivided
interest). It
can be all the rights embraced
by a patent
limited to any geographical
part of the United
States.
A license is more like
a rental or lease.
The owner of the property,
the licensor,
retains ownership; the
buyer, the licensee,
receives the right to operate
under the property
right, be it a patent,
trade secret, know-how,
copyright, or trademark.
An exclusive license
gives the licensee the
sole and exclusive
right to operate under
the property to the
exclusion of everyone else,
even the licensor.
A non-exclusive license,
in contrast, simply
permits the licensee to
operate under the
licensed property but without
any guarantee
of exclusivity. If the
licensor can find
more licensees he can license
them. Others
may already be licensed.
The licensor himself
can operate under the property.
An assignment by definition
is exclusive
since the assignee is acquiring
full right
and title to the property.
Many licensees
prefer an assignment or
exclusive license
because they want a clear
playing field with
no competitors in order
to maximize their
revenue from the property
and justify the
license cost. Within either
of these forms
-- exclusive license or
non-exclusive license
-- there may be included
a right to sublicense,
which is the right of the
licensee to license
others. This removes part
of the licensor's
control over the property
and at the same
time increases the licensee's
liability for
not only his own conduct
and payment, but
that of all his sublicensees
too. A sublicense
is an important and valuable
right which
is not automatically conveyed
with the primary
license right. It must
be expressly granted.
The term "transferable"
in a license
means that the license
can be transferred
as a whole along with the
part of the licensee's
business to which the license
pertains: it
does not confer the right
to sublicense.
Licensors often prefer
a non-exclusive license
because it spreads their
royalty income over
a number of diverse licensees,
thereby increasing
the chances of a successful
return. In addition,
if the property is freely
available to all
credible businesses then
no one is left out
or disadvantaged. All have
an equal chance
to compete and the chances
are lessened of
a lawsuit from a rejected
potential licensee.
Great care must be exercised
to clearly define
the property being licensed.
Is it more than
one patent or just one
patent, or only a
part of one patent? Is
it just the trademark
or the entire corporate
image, names and
advertising and promotional
scheme and graphics?
If it concerns copyright,
does it cover just
the right to copy a book
or other printed
material in the same print
form, or does
it include the right to:
translate it into
another language; adapt
it for stage, screen
or video; create derivative
works; merchandise
its characters and events
on T-shirts and
toys? If it involves know-how
or trade secrets,
where are they defined?
The licensee must
be sure that he is getting
what he wants
and needs. And a licensor
must be sure to
make clear the limits of
his grant. In a
software license if the
grant is only to
use the software, not to
modify it or merge
it with other software,
that must be expressly
stated.
Time limits must be unequivocally
stated.
When a patent is involved,
care must be taken
not to extend the term
of the license beyond
the expiration of the patents.
Any such arrangement
can be considered an attempt
to extend the
patent right beyond the
patent's life and
can invalidate the license
as well as making
the patent unenforceable.
Payments should
be scheduled for post-patent
expiration only
if the totality of the
business circumstances
dictate: for example, if
it was done to ease
the payment burden and
is not truly an extension
of the patent exploitation.
If trademarks, copyrights,
know-how or trade
secrets are involved in
addition to or instead
of patents and the royalties
and other considerations
are based at least in part
on them, then
the patent life limit is
not strictly applicable.
For example, in one case
a license for twenty-five
years was upheld against
a charge of unlawful
extent of the patent monopoly
because it
was originally predicated
on trade secrets
which were the subject
of a later filed patent
application that finally
matured into a patent.
In many cases, shorter
license periods are
preferred because it permits
the licensor
to re-acquire control and
the licensee to
get out from under the
burden sooner if the
license is not working
out. There is no time
period on assignments.
Assignments, like
diamonds, are forever.
A license may have numerous,
different limitations
besides time. The unit
quantity or the dollar
value of products or services
sold may be
limited. Thus a licensee
could be limited
to production and sale
of only a fixed number
or dollar value of the
potential product
per month or per year.
But this approach
runs the risk of violating
the antitrust
law, if, for example, the
licensor uses this
limitation to control supply
and prices in
the market.
The license can also be
limited geographically.
That is, the licensee may
be limited to making
and selling a patented
device only in a single
county, state or region.
Care must be taken
here, too, to avoid conflict
with the antitrust
laws. And it must be understood
that the
geographical limits only
apply to the first
sale. In the case of a
patent the licensee
can only be restricted
to making and selling
the patented device in
the designated territory.
Once the licensee has parted
with the product,
no further control can
be exercised over
where it can be used or
re-sold. Geographic
limitations appear frequently
in trademark
licenses, especially those
involving franchising.
Field of use limitations
are quite common
too. This limitation restricts
the licensee
to exploiting the licensed
property only
in a designated field or
market. For example,
a license for technology
relating to an engine
may be limited to separate
uses or sizes
of engines for each different
license. The
division could be by use,
such as lawn mowers,
farm tractors, automobiles,
boats and planes,
or by size, such as 0-10
horsepower, 11-50
horsepower, 51-500 horsepower.
If the licensed
property is a trademark
or copyright the
license might be limited
to only wholesale
or only retail, or certain
types of stores
such as discount stores,
chain stores, supermarkets
or department stores. Or
the limitation could
be to the type of goods:
toys, children's
clothing, children's furniture,
posters,
a TV show, a comic book
serialization. In
one case a licensee was
prohibited from use
of a patented product with
a specific chemical
compound but was permitted
all other uses
of the product, and this
was held a lawful
limitation.
Clauses which require a
licensee to buy certain
supplies from the licensor
as a part of the
license agreement are often
appealing to
licensors, but they are
not recommended.
Such provisions are commonly
referred to
as "tying" clauses
and can violate
the antitrust law. To compel
a licensee to
take one item in order
to get another is
anticompetitive. However,
if there is a valid
business reason it may
be permissible: the
patented machine won't
work well without
the proper quality supplies.
But even in
that case the courts prefer
that the licensor
publish specifications
that must be met and
then let the licensee purchase
its supplies
from whomever it wishes
so long as the specifications
are met.
Avoiding tying is a common
problem where
the licensed property involves
trademarks:
trademark licensors are
compelled to monitor
the product produced and
sold or the service
provided by the licensee
in order to ensure
that the public is getting
the quality that
the licensor has established
for its goods
or services. When a trademark
is assigned
or sold with the entire
business to which
it relates, no further
supervision or control
need be exercised by the
original owner over
the subsequent use of the
mark. However,
if the owner of the mark
is merely licensing
the mark to another, control
must be exercised.
Otherwise the transfer
is deemed merely a
naked license and constitutes
an abandonment
of the trademark. The rationale
behind this
is that without the requirement
of control
the right of a trademark
owner to license
a mark separately from
the business in connection
with which it has been
used would create
the danger that products
bearing the same
trademark, those of the
licensee, would be
of diverse quality. If
the licensor were
not compelled to take some
reasonable steps
to prevent misuses of his
trademark in the
hands of the licensees,
then the public would
be deprived of its most
effective protection
against misleading use
of a trademark. The
trademark would no longer
be a guarantee
of consistent quality established
by the
licensor. But even with
such extreme burdens
and consequences on the
licensor, courts
prefer the public specifications
to tying.
The delicate issue of tying
can arise in
many ways: a licensor requires
that a licensee
take a license under a
patent in order to
get a license under a trademark,
or under
a number of patents in
order to get the one
patent the licensee desires.
Again, however,
valid business reasons
can excuse such behavior.
A licensor offered a license
for 1.5% royalty
under all of its patents.
The licensee refused,
for it only wanted a license
under one specific
patent. The licensor refused
to license that
particular patent for anything
less than
1.5% royalty but was willing
to throw in
all the other patents along
with it if the
manufacturer wished. The
particular patent
that the licensee wished
to license had already
been licensed to another
at a royalty of
1.5%, and if anyone were
granted a license
at a better rate the original
licensee would
also have to receive the
lower rate. The
court held there was no
unlawful tying.
Perhaps the most universal concern in negotiating
a license is: how do you assign a dollar
value to intellectual property? First, you
determine what it cost to acquire that property,
to build that property. There is the research
and development cost involved in coming up
with a new invention; there is the design
cost of coming up with a new trademark or
copyrighted work; there is the cost of commercializing
the invention; there is the cost of advertising
and promoting the trademark or copyrighted
work, which can run into millions of dollars
a year; and there are always incidental costs,
like the legal costs, engineering costs,
and accounting costs. All of these are hard
costs that went into creating the property.
Second, you can determine
how this intellectual
property affects the profitability
of the
product or the business.
Can you charge more
because you have a famous
name, or because
of the new features that
your invention has
bestowed on the product?
Can you cut costs
because of the new technology
of the invention?
If you can, you determine
dollar values for
those figures.
You might also determine
how much your intellectual
property increases your
gross revenues by
opening new markets or
by getting a greater
percentage of established
markets. All of
these figures can be converted
into dollar
amounts for valuation.
Now you might say this
is all speculation,
a kind of science fiction.
But have you read
any business plans lately?
Their projections
of geometrically increasing
sales, revenues
and number of employees
are a bit soft too,
but they do create a place
to start and they
do have a factual basis.
And the other party
will be running its own
set of numbers, so
each party has a place
to start. Then the
arms-length bargaining
will decide the final
value of the property.
While a "typical"
royalty rate
for a non-exclusive license
for patents,
trade secrets or know-how
is universally
stated to be 5%, that rule
is honored in
the breach as much as in
the keeping. Non-exclusive
license royalty rates in
patent licenses
can be 10%, 20%, 25%, or
even higher. And
exclusive license royalty
rates always tend
to be higher because the
licensee is getting
total exclusivity and the
licensor is at
risk if the licensee does
not perform. Exclusive
licensors generally demand
initial payments
for the same reason. In
determining a reasonable
royalty as a damage award
in an infringement
suit, courts have considered:
the remaining
life of the patent; the
advantages and unique
characteristics of he patented
device over
other prior devices; evidence
of substantial
customer preference for
products made under
the patent; lack of acceptable
non-infringing
substitutes; the extent
of the infringer's
use of the patent; and
the alleged actual
profit the infringer made
which is credited
to the patent.
In one case a jury awarded
a royalty rate
of 28% which was later
reduced by the court.
In other cases courts have
awarded a 25%
royalty (when the parties
asked for 48% and
3%) and 8% (when the parties
sought 40% and
3.4%). One court announced
that as a general
rule of thumb a royalty
of 25% of net profits
is used in license negotiations.
In one celebrated
case the courts in determining
whether the
royalty charged was reasonable
considered
the fact that in one licensee's
locale the
shrimp were smaller than
in the other licensee's,
and so more shrimp had
to be peeled to make
a pound. Thus a per-shrimp
royalty heavily
burdened one licensee,
while a per-pound
royalty heavily burdened
the other licensee.
Royalty setting does not
always lend itself
to a simple approach.
Trademark royalties vary
widely with the
scope of the rights converted
from a mere
license to a total business
franchise package.
Copyright royalties are
in the neighborhood
of 15% for authors of books
and games including
video games, but these,
too, vary widely
as a function of the nature
of the rights
conferred: movie rights
to Stephen King's
latest thriller, merchandising
rights to
Roger Rabbit for children's
underwear.
The length of time or term of the license
is critical in setting royalties, too. The
longer the term, the longer the licensor
is at the mercy of the licensee's ambition.
This drives up the price, both lump-sum,
up-front payments and royalty schedules.
Geographical coverage counts, too. The more
of his exclusive territory he gives up the
more the licensor will demand. Uncertainty
in the market place for the licensed property
due to an untested product, environmental
concerns, or FDA approval drives down the
price, while savings in manufacturing and
sales costs, or a famous trademark, or a
"hot, new property" like E.T. drives
up the price. A new feature that makes the
product more appealing without great increase
in cost will also tend to increase the royalty
rate or up-front payment.
Care must be taken in setting
the basis of
the royalty. It is tempting
to strike right
at the heart of the matter
and settle on
a royalty, for example,
of one half the savings
or one tenth of net profit.
But these are
uncertain and changeable
quantities which
create the opportunity
for mischief and misunderstanding.
It is better to translate
those values into
the equivalent percentage
of the selling
price, the most visible
and easily ascertainable
figure. Separately, care
should be taken
to choose a fair and proper
royalty base.
It is generally not fair
to claim a royalty
on a one million dollar
system based on the
inclusion of a $100 patented
component. On
the other hand, if that
$100 component is
the very thing that makes
the million-dollar
system work and makes it
appealing and saleable,
it would be unfair to base
the royalty only
on the $100 component.
In any commercial agreement
in which the
consideration promised
by one party to the
other is a percentage of
profits or receipts
or is a royalty on goods
sold, there can
be found nearly always
an implied promise
of diligent and careful
performance and good
faith. But licensors generally
seek some
way to ensure that the
licensee will use
his best efforts to exploit
the property
and maximize the licensor's
income. One approach
is simply to add a clause
in which the licensee
promises to use his "best
efforts".
Another approach is to
compel certain achievements
by the licensee. The license
may require
a minimum investment in
promotion and development
of the property. That may
be expressed in
dollars, man hours or even
specific stated
goals of performance or
sales. Or the simpler
approach of a minimum royalty
can be employed:
the licensee pays a certain
minimum dollar
amount in running royalties
annually, whether
or not the licensee's sales
actually support
those royalties. Not a
pleasant condition
for the licensee but a
lot of peace of mind
for the licensor.
Perhaps the best insurance
for performance
is a competent, enthusiastic
licensee. A
little preliminary investigation
of the licensee:
net worth, credit rating,
experience, reputation,
manufacturing/sales capability,
prior successes/failures,
can assuage a lot of fears
and eliminate
risky licensees. A reverter
clause which
evicts the licensee and
returns control to
the licensor upon unmet
goals is the ultimate
protection. Often the licensor's
greatest
concern is that the licensee
might now or
later sell one or more
competing products
so that there arises a
plain conflict of
interest. A non-compete
clause can prevent
this, but antitrust dangers
are raised by
such clauses and licensees
do not like this
constraint on their freedom.
Other approaches
are safer, e.g., minimum
performance levels.
The license should make
clear that there
is no implied grant under
any other property
of the licensor. But the
licensor must be
sure to convey in the license
all the rights
necessary to fully effect
the purpose of
the license. Granting a
license under a patent
while holding back on another
dominant patent
or important improvement
patent is not only
inviting trouble, it could
raise more serious
issues of misrepresentation
or fraud. Even
selling a patented machine
may imply a license
to make the patented device
produced by the
machine. For example, when
the owner of a
patent on a machine and
method for making
certain duct work out of
specially shaped
segments sold the machine
to duct fabricators,
they were free to practice
the invention
using specialty parts supplied
from competitors
of the patent owner, and
neither the fabricator
nor the supplier were guilty
of infringement
because the sale of the
machine implied a
license to complete assembly
of the ducts
according to the patent.
Grant-back clauses are
those that compel
the licensee to assign
or license back to
the licensor any new properties
developed
by the licensee. Licensors
do this so they
will not be cut out of
their own technology
by the march of progress.
Licensees object
because they do not wish
to perpetuate the
dominance of the licensor
nor to share the
innovations that only they
have funded. Antitrust
issues can arise if the
grant-back is of
an assignment or exclusive
license, especially
if the licensor has a right
to sublicense
and uses this perpetual
technology lifeline
to control a segment of
an industry. A mere
non-exclusive license for
the purpose of
permitting the licensor
to keep a level playing
field is generally acceptable.
Generally there is included
in each license
a provision that the license
is not transferable
by the licensee: the licensee
cannot assign
the license. This is done
to prevent the
licensor from suddenly
finding himself in
bed with a licensee he
did not choose or
approve, one who might
be his largest and
toughest competitor and
whom the licensor
would never have licensed.
However, the constraint
on transferability of the
license is not
without limitations. For
example, the licensee
cannot be prevented from
transferring the
license along with the
sale of the business
to which the license pertains.
A right of
first refusal to the licensor
sometimes alleviates
the problem, as do short
license terms.
Very often licenses are
the result of litigation
or threatened litigation.
Especially in these
cases a release for past
infringement should
be included. This simply
ensures that the
licensee cannot be sued
for damages accrued
prior to the date of the
license.
A marking clause is normally required by
the licensor. Such a clause requires the
licensee to accompany each use of the trademark
or copyright or each product embodying a
patented invention with a suitable notice
identifying the patent number or announcing
the trademark or copyright protection. This
not only avoids any misunderstanding as to
ownership of the property, but also bestows
certain rights against copiers not otherwise
available: a patent infringer is not liable
for damage if he had no notice of the patent,
unless the patented product was marked with
the patent number.
The desire for a fair and
even playing field
normally dictates the inclusion
of a "most
favored licensee"
clause, which promises
that if a later licensee
is given a license
on better terms than an
earlier licensee,
then the earlier licensee
has a right to
insist on those better
terms for itself.
A warranty clause compels
the licensor to
state that he has all right,
title and interest
in the property necessary
to undertake this
licensing agreement: there
are no other licensees
(if this is an exclusive
license), there
are no other prior commitments,
the government
has no rights, and other
similar assurances.
Basically the licensor
guarantees that he
has the right to give what
he is giving.
Serious problems can arise
when an infringement
occurs. Who will sue the
infringer? Who will
pay for the litigation?
Who will choose and
control trial counsel?
Who will share in
any recovery and how will
it be proportioned?
All of these concerns are
handled in one
or more clauses under the
heading of obligation
to sue infringers.
Of no less importance is
the handling of
new properties which are
created under the
license. Who is to pay
for the filing for
new trademarks and copyrights
and patents?
Who will choose and supervise
the patent
attorney chosen? The licensee
may, as the
licensor, wish to see the
property strongly
upheld in any litigation
in order to strengthen
the licensee's position
against its unlicensed
competitors. But there
are conflicting interests
here, too. While the licensor
wants to sustain
his property against infringers,
the licensee
may hope that the scope
of coverage of the
property is narrowed or
eliminated so the
licensee can be free from
the need for a
license. The same conflict
is possible in
pursuing patent, trademark
and copyright
protection initially. Broad
coverage granted
by the U.S. Patent and
Trademark Office or
the Copyright Office will
benefit the licensor
but not necessarily the
licensee.
The use of the licensor's
name on or in connection
with the licensed property
should be clearly
defined. In some cases
the licensor desires
its name to be used fully
and properly. In
other cases the licensor
may allow its name
to be used only in specific
forms and in
limited situations, or
may not allow its
name to be used at all.
The licensee may
have similar desires. These
issues depend
on the party's need to
promote its name on
one hand and to protect
its reputation and
limit its liability on
the other hand.
The responsibility for
defending against,
and indemnification for,
product liability
suits is an ever-growing
concern. A licensor
can be liable for the deeds
of its licensee
if the licensor's technology
is used in the
product or even if only
the licensor's name
or trademark is associated
with the product.
A clause that defines each
party's responsibilities
and duties is useful to
minimize disputes
if such problems arise.
Confidential disclosure
clauses are necessary
in nearly every license
agreement, especially
those involving trade secrets,
know-how and
patent applications. Such
clauses are not
only necessary in protecting
the property
which is the subject of
the license, but
also of all the technical,
business, financial,
marketing and other information
that the
parties will learn about
each other during
the license term and even
during negotiations
before the license is executed.
A clause defining adherence
to government
regulations is also a commonly
needed provision.
Who must obtain FDA approval?
Who must obtain
the export license? approval
from the State
Department regarding the
munitions list?
Who is liable for the proper
labeling? importation
taxes? export fees?
There should be a clause
that defines the
circumstances -- time,
conditions, notice
-- under which each party
can terminate the
license. Typically the
licensee can elect
to terminate after some
initial period of
time and the licensor can
terminate upon
any default in payment
or other obligations
by the licensee. Each party
can terminate
upon a breach of the agreement
by the other.
And the license normally
terminates or expires
automatically after a predetermined
period.
No license is complete
without reporting
and payment provisions.
The licensee must
report sales or use of
the licensed property
periodically (monthly,
quarterly) in written
statements setting forth
the number and dollar
value of sales, for example,
in the case
of a patented product.
Payment is made according
to that report within a
predetermined period.
The licensor has the right
to inspect the
licensee's books at reasonable
times to ensure
that the reports are honest
and accurate.
Variations in the amount
of royalties paid
of more than some stated
percentage, e.g.,
10%, often requires a penalty
such as twice
the deficiency, for example,
or payment of
all audit costs.
FOREIGN LICENSES
The foregoing clauses and concerns pertain
generally to all licenses, domestic U.S.
as well as foreign. There are other clauses
which are more peculiarly suited to foreign
agreements.
Geographic divisions may be more readily
applied and more essential in order to abide
by the somewhat different treatment of intellectual
property in each country. The manufacture
and use of the patent, trade secret and know-how
based product may be limited to the U.S.,
but sales may be permitted worldwide.
Payment must be defined
as to the currency
in which it will be made
as well as who will
pay any taxes or transfer
charges.
Government approval for transfer of royalties
and repatriation of capital must be provided
for between the parties. Some countries subsidize
their own companies who can then sell below
market price.When dealing with a licensee
who has that subsidy available the licensor
will insist on a clause that grants him the
same subsidy as the licensee or denies it
to the licensee in order to maintain a level
playing field in world markets.
Provision must also be
made for the particular
currency in which payment
will be made. Indexing,
such as to the price of
gold, may also be
included. Language must
also be included
to condition the effective
date of the license
on the date when all government
rules and
regulations of all involved
countries have
been met: when the U.S.
government approves
the export of the technology,
the license
is registered with the
proper authorities,
and the foreign government
approves the license.
Generally a force majeure
clause common in
European countries is employed
to excuse
defaults when external
events -- war, insurrection,
strikes, shortages, lightning,
flood -- prevent
performance. A clause designating
the official
language of the original
license document
and of any counterpart
originals as well
as the controlling language
in case of dispute
is often included. Finally,
a clause which
specifies the country whose
laws are to apply
in resolving any dispute
is added to remove
any possible source of
confusion in interpretation
of the license.
CONCLUSION
A license agreement is
a special form of
contract in which each
party promises to
do something in consideration
of the promises
of the other party. It
is based on a business
understanding between the
parties and common
sense applied to attain
the business goals.
But it is more difficult
and complex than
normal contracts because
its subject matter,
intellectual property --
patents, trademarks,
copyrights, trade secrets
and know-how --
are very unique forms of
property. The properties
require special action
for their creation
and maintenance. And great
care is necessary
in licensing such properties
to maximize
their returns and prevent
their loss.
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