Important Agreements

and Negotiation Strategies

For Start Ups

Dr. Kalyan C. Kankanala

kalyan@brainleague.com
91-80-41489502/04
www.brainleague.com
Blog: www.indianipinfo.blogspot.com
IP Newsletter - IP Convergence - Register at www.brainleague.com

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
• Non-Disclosure Agreement

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Clauses
• Confidential Information
• Permitted Purpose
• Scope of Disclosure
• Purpose
• Parties
• Legal Instruments
• Term
• Survival
• Remedies
• Other clauses

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
• Employment Agreement

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Clauses
• Intellectual Property
• Ownership
• General
• Specific
• Transfer
• Documentation and Support
• Third Party IP
• Confidentiality
• Non-competition
• Non-solicitation
• Moon-lighting

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
• Patent Agreements

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Transfer of Patents

• Assignment
• License

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Assignment

• Transfer of Ownership
• Partial or Complete
• Writing and Signature
• Register

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 License

• Authorization or Permission
• Exclusive Rights
• Territory
• Writing
• Signature
• Register

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Types of Licenses

• Exclusive
• Non-exclusive
• Sole

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Important clauses

• Recitals
• Definitions
• Grant
• Royalties
• Term and Termination

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Recitals
• Parties
– Licensor/Licensee
• Addresses
• Dates
• Background of the transaction

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Definitions

• Interpretation clause
• Consistently used words
– Specific/certain/lucid
• Attribute specific meaning
• Apply to entire agreement

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Examples
• Licensor shall mean ABC company having a place of
business in Bangalore and shall include its subsidiaries,
assignees and legal representatives.

• Licensee shall mean Kalyan, resident of xyz, Bangalore

and shall include his successors, assignees,
administrators, executors and other legal
representatives.

• Licensed Patent shall mean patents granted in USA

under patent numbers xxx, yyy and patent applications
pending before Indian Patent Office having filing
numbers xxx, and YYY.

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Grant Clause
• Most important
• Defines scope of agreement
• States
– Parties
– Type
– Subject
– Rights
– Territory
– Term

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Example
• Licensor grants to Licensee a nonexclusive license to
use the Licensed Software within the territory of
India from 1st January, 2005 to 1st January, 2006.

• This clause specifies

– Who grants to whom -Licensor to Licensee.
– Type of license - Nonexclusive License
– Rights – Use Licensed Software
– Territory - India
– Dates - January, 2005 to 1st January, 2006

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Term and Termination
• Term
• Events
– Material Breach
- Nonpayment of royalty, etc.
– Bankruptcy
– Insolvency
– Act of god
• Rights after termination
• Confidentiality

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Example
• Unless earlier terminated as hereinafter provided, this
Agreement shall extend to each country in the Territory for a
term of ten (10) years from the Effective Date. The term of the
agreement is renewable at the option of the parties and such
term and conditions shall be finalized after negotiations based
on terms agreeable to both the parties.

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Royalty Clause
• Type of Royalty
– Lump sum royalty
– Fixed Royalty
– Running royalty
• Combination.
• Mode and Date of payment
• Accounting and Record keeping
• Non payment consequences.

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Example
• XYZ agrees to pay ABC, a fixed royalty of Twenty-
Thousand-Dollars ($ 20,000) per every Calendar Year
after the first year. For the first Calendar Year, XYZ
shall pay ABC a fixed royalty of Ten-Thousand Dollars
($ 10,000). Such sum shall be paid on or before
December 11th of every Calendar Year.

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Other Clauses

• Indemnity
• Warranty
• Liability

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 NRDC V. ABS

• Patent License
• Not registered
• Expiry of patent term
• License invalid

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
• Other Agreements

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Clauses
• Intellectual Property
– Pre-existing IP
– Ownership
– Transfer and Documentation
– Inventorship
– Third Party IP
– Warranty and Indemnity
• Confidentiality
• Exclusivity and Non-Competition

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.
 Any
Questions, Comments or
Observations?

Copyright, Brain League IP Services, 2009.

Non-commercial use is permitted.