Expert Group Report Management of Intellectual Property in ... - KoWi

it is not usually required to pay additional licensing fees unless the technology turns out to be
successful.
3.4.6. Patent Management
If the subject matter of the IPR includes patent portfolio then it is important for the parties to agree
exactly where responsibilities will lie. Issues include decision making about the prosecution towards
grant of the portfolio, allocation of responsibility of meeting the costs of such prosecution. In
addition, responsibility for pursuing infringers or being entitled to defend infringement allegations
needs to be agreed.
3.4.7. Termination of License
Obviously to be comfortable that the license rights held by the company are sufficiently robust to
justify substantial development by the company in the technology, there must be very limited grounds
for the license to be terminated. There is likely to be a relationship between any performance
obligations, which the company has undertaken with regard to actively developing the technology.
The PRO should only be entitled to terminate any license if there has been a material breach of the
provisions of the agreement, including where the expectation that the company proactively develops
technology has not been met. Careful discussion between the parties about the different triggers for
any such termination needs to be set out. Linked to this issue may be an option to identify an external
arbiter whose opinion about the compliance by either party with the terms of the license may be
helpful.
3.4.8. Indemnity/Liability
While the company will require some satisfaction that the PRO is entitled to enter into a License
Agreement, there may be warranties requested about ownership of the relevant IPR etc. However,
there may be a downstream exposure to the PRO to claims by third parties who may have suffered loss
as a result of using the technology made available by the licensee company. It is usual for there to be
at least product indemnity offered by the company to the PRO. However, downstream responsibilities
to third parties need to be agreed carefully between parties. Different legal jurisdictions have different
expectations of the retained responsibility of any owner of IPR. For example in the United States
there can be reach through by claims to the patent owner notwithstanding the fact that the license may
pass on responsibility to a licensee company.
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