1. Spelling
Canadians and Americans
spell “licence” differently. In
Canada, the spelling is “licence”
if the word is a noun and
“license” if the word is a verb. In
the U.S., the spelling is “license”
regardless of whether the word
is a noun or a verb. The same
is true for “practice” and
“advice” (although those
terms rarely appear in
licence agreements.)
CHRIS
BENNETT
copyright law prohibits “
copying” of works. Therefore, if the
licensed technology is software
or some other type of work, it’s
important to include a licence to
“copy” the work (in addition to
the licence to “use” the work).
allows the licensor to carry out
the licensed activities itself, but
prohibits the licensor from
licensing third parties to carry
out the licensed activities.
7. Quota
5. Territoriality
2. What is
being licensed?
If
you’re
reviewing a
technology licence
agreement for the
first time, here
are 10 points to
consider:
Intellectual property
rights are limited by geog-
raphy. The licensor may
have rights in one coun-
try but not another.
Therefore technology
licences often include
a geographic terri-
tory in which the
If the licence will be sole or
exclusive, the licensor will want
to impose a quota to ensure that
the licence is being well-
exploited and the royalties paid
to the licensor are sufficient to
justify the exclusivity.
pay the royalties. Licensees
often request representations
and warranties regarding
ownership, right to grant the
licence, validity and enforceability of IP rights, authorship/
inventorship and non-infringe-ment of third party rights. Each
party will want to be indemnified if any of these representations or warranties is untrue
and each party will want the
other to maintain enough insurance to back up the indemnification clause.
8. Compensation
10. Infringement
It’s important to
ensure that the
licensed technology
is described in detail.
Software licences
often only contain the
name of the licensed
software, with no further
description. At the very least
the agreement should include
the version number or date of
the software, but it should also
include a description of what
the software (or other technology) is and what it will do.
There are various ways a licen-
sor can be compensated for
granting the
licensed rights
apply. This is especially
important if the licence in
question will be exclusive.
3. Licensor’s rights
Next, you should ask whether
the licensor actually has any
rights in the licensed technol-
ogy. A licence is permission to
do something that the licensor
can otherwise prevent the licen-
see from doing. If the licensor
doesn’t have a patent or doesn’t
own the copyright or other intel-
lectual property in the licensed
technology, then the licensee
might not need a licence after
all. And without any rights in
the licensed technology, the
licensor will be unable to stop
third parties from carrying on
the licensed activities in compe-
tition with the licensee.
6. Exclusivity
4. A licence to do what?
Intellectual property law uses
very specific terminology. For
example, trade-mark and patent
law prohibit “use” of trade-marks
and patented technology, and
There are three options when
it comes to exclusivity. The first
and most common is a non-
exclusive licence, which imposes
no restrictions on the licensor’s
ability to carry out the licensed
activities itself or to permit third
parties to carry out the licensed
activities. The second is an
exclusive licence which pro-
hibits the licensor from carrying
out the licensed activities itself
or permitting third parties to
carry out the licensed activities.
The third is a sole licence which
licence. The
most common are up-front
licence fees and ongoing royal-
ties. When royalties are the
chosen method of compensation,
the licensee will be required to
report revenues and make roy-
alty payments on a pre-deter-
mined schedule. The licensor
will also want an audit clause to
ensure that revenues are being
reported correctly.
Another important issue is
infringement. The agreement
should set out a procedure in
case the licensee receives a
notice that it is infringing a third
party’s intellectual property rights. Likewise,
the agreement should
contemplate what will
happen if either party
discovers that a third
party is infringing the
licensed technology.
There are other issues to consider (for example, deliverables,
training, support, term, termination, improvements and escrows),
but hopefully the above summary
gives you a good idea of what to
expect in your next technology
licence agreement. n
9. Representations,
warranties and indemnities
Licensors often request representations and warranties
regarding licensees and their
ability to exploit the licence and
Chris Bennett is the head of
Davis LLP’s Technology Law
Group in Vancouver and is a
member of its Intellectual Property Group.
We want to hear from you!
Email us at: tlw@lexisnexis.ca
Facebook as means of service will increase
Facebook
Continued From Page 9
In Blaney v. Persons Unknown
(unreported) a blogger, Donal
Blaney, was being impersonated
on the Internet through a Twitter
account using his photo and links
to Blaney’s real blog. An injunction was requested and obtained
on the basis that the impersonator
was in breach of intellectual property rights.
The issue became service of the
injunction as the defendant was
anonymous. The offending Twitter
page was used for service because
it apparently belonged to and was
regularly visited by the defendant
and it was possible to monitor via
Twitter whether the defendant
had received the injunction. The
message was sent to the defendant’s Twitter account with a link to
the full text of the injunction.
Returning to Australia, Byrne
& Howard ([2010] FMCAfam
509) was a family law case involving proof of paternity. An order
for substitutional service by Facebook was granted following various attempts to bring the proceedings to the defendant’s
attention. When the defendant
failed to appear, the court was
asked whether proper service had
been effected.
Evidence was put forward of
the details of the defendant’s Facebook page. There was also an electronic confirmation of delivery.
The court put emphasis on the
evidence that shortly after the service message was sent to the
defendant’s Facebook page, he
took his site down.
Based on this information, the
court found the proceedings were
brought to the defendant’s attention and he was properly served.
What next?
The enormous popularity of
Facebook and other social networks offers a creative and
inexpensive means of streamlining and expediting the service
of documents.
Service by Facebook is not a
panacea, nor should it be held out
as the primary means of service,
but we can expect increasing use
of this option whenever elusive
defendants try to shield their location and availability in the hope of
escaping judicial process. n
Leonard Polsky is Litigation
Counsel with the Calgary office of
MacPherson Leslie & Tyerman
LLP, practising in the areas of
commercial litigation and
employment law. Stacey Wade is
an associate at the same office
and assisted in the preparation of
this article.
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