Exercise A: Problems in Licensing Scope and Strategy
1. Multimedia production. A YouTube phenomenon in a foreign country has developed a multimedia production from live performances of herself and her friends, clips downloaded from the Internet, “sampling” from CDs she bought, and pictures of her own and her friends’ artistry. The clip is about ten minutes long, and it’s terribly funny. Your client wants to post the clip on his own Website. What advice would you give? Could you think of any ways to save your client money?
2. Importation of electronic device. Your client is a California distributor
of consumer electronic devices. It would like to handle a new patented
device, made in Korea, with software designed in the U.S. The manufacturer
would require the distributor to do final assembly in California, as well as
to load and initialize the software from a master disk. Doing all this
would require your client to purchase special equipment and to hire one or possibly
two additional employees and train them to perform these functions. Your
client will need to license patents, copyrights and confidential information
for this purpose. What scope of license would you advise your client to
request? What other terms would you expect to see in a draft from the
manufacturer, and how would you advise your client to respond?
3. Exportation of catalyst. Your client has developed a
chemical catalyst that can be used in a wide range of chemical reactions to make
a wide range of different products. Patents on the catalyst and methods
of using it are pending in the United States and major foreign jurisdictions. Meanwhile,
your client is protecting the catalyst and its use as confidential information
and trade secrets. In response to general advertisements in chemical-industry
trade journals, your client has received inquiries from: (1) a multinational
pharmaceutical company regarding use in making drugs; (2) a U.S. consumer-products
company regarding use in making cosmetics; (3) an California company regarding
use in making paints; and (4) a European university regarding use in scientific
research. What scope of license would you advise your client to suggest
in its first proposal to each of these prospective licensees? What requests
or demands would you expect each of the four to make and why?
4. Distribution of cinematographic film. Your client is
an independent Washington film producer known for low-budget “artsy” films. Its
latest film won a prize at the Cannes Film Festival. Now many major film
distributors are seeking rights to market the film in the United States and abroad. What
licensing strategy would you advise your client to take?
5. University biotechnology assay. Your client is a major
research university, which owns all rights to a biotechnological method developed
by a Nobel-prize winning scientist. The method can detect the presence
of microbes and viruses in small samples of body fluids with astounding accuracy,
low cost and speed. A U.S. patent application on the method was filed
ten months ago. Requests for licenses
have been received from commercial firms and universities all over the world. Insofar
as scope is concerned, what licensing strategy would you recommend and why? Would
you give your client any other advice?
6. Drafting restraints effectively. In Exercise 4 above (Distribution of Cinematographic Film), your client has decided to license a major multinational movie distributor to manufacture and sell DVDs of the licensed film in the European Union only. If the license defines its subject as “the Film,” describe how you would draft the granting clause to impose the rights and territorial restraints most effectively from a legal standpoint.
7. Trademarked beverage license. Your client is an Australian
soft-drink manufacturer. Its new drink, sold under the trademark “Coolabong,” in
icy blue script, is a sensation. Patent are pending on the drink in Australia
and major international jurisdictions, and the trademark was registered in Australia
three months ago. Many soft-drink makers have asked for licenses to
make and sell the drink. Insofar as scope is concerned, what should be
your client’s licensing strategy? What special problems might you expect
to arise, and how would you solve them?
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