Legally Speaking

BOOK AVAILABLE!

THE BUSINESS OF LICENSING The Essential Guide for Intellectual Properties

Licensing has has exploded into a $250+ billion worldwide industry at retail and generates more than $7 billion in royalty income for those property owners who are savvy enough to license their properties for a wide variety of consumer products. About 8 years ago, lawyer Gregory J Battersby and licensing veteran Danny Simon introduced the first Basics of Licensing book. They published a revised version a couple of years later and followed it with a Licensee edition and then finally an International edition. Recognizing that there was a degree of commonality between these editions, Battersby and Simon concluded that it was time for the definitive work on licensing, hence, The Business of Licensing which combines the best of all three prior editions and takes the subject to the next level. This book takes the reader through the nuts and bolts of how to conduct a licensing program and handle many of the problems that it might face There is a substantial amount of reference material. They have included an expanded history of merchandising, and an extensive collection of the forms that any licensing professional may need which they intend to provide to purchasers with electronic access to the forms via Dropbox.

The Complete Business of Licensing is available at a cost of $39.95 ($34.95 for LI members). https://www. totallicensingworld.com/site/business_ of_licensing

Gregory J. Battersby Battersby Law Group, LLC 25 Poplar Plains Rd. Westport, CT 06880 (203) 454-9646 gjbattersby@gbiplaw.com www.gbiplaw.com

Tips on Drafting NDA’s

By: Gregory J. Battersby

A Non-Disclosure Agreement or “NDA” is a contractual agreement between two parties involving the use of one party’s “Confidential” or “Proprietary” information by the other party.

It may also be called a Confidential Disclosure Agreement. These agreements cover confidential information of various types, e.g., technical information, business and sales data, financial information, even private conversations. Politicians and executives regularly use them to shield potentially sensitive information from the public or competitors.

The party disclosing the information is usually called the Discloser or Disclosing Party, while the party receiving the information is called the Recipient or the Receiving Party. Such agreements can be “oneway,” i.e., only one party will disclose confidential information to the other party, or “mutual,” where both parties exchange confidential information. Most companies have developed and use their own standard NDA agreements.

All NDA’s have specific standard provisions, namely: • An identification of the parties; • A description and definition of the specific confidential information to be covered, e.g., technical data, business information, sales data, plans, etc.; • The purpose of the disclosure and to what it will pertain, e.g., a potential license agreement, a buy/sell transaction, etc.; • The type of information to be excluded from coverage, e.g., publicly available information, independently developed or discovered information, etc.; • How the confidential information can….and cannot…be used, e.g., a party may neither use nor disclose the information; • The steps a Recipient must take to preserve the confidentiality, e.g., commercially reasonable efforts, the same degree of care the Recipient would take with its own information, etc.; • The length or duration of the agreement, e.g., five years or in perpetuity; • The Recipient’s obligations upon termination, e.g., return, destroy, etc.; • What law will govern the agreement, e.g., typically the state or country of the drafting party; • How and where disputes will be resolved, e.g., litigation or arbitration; and • An affirmative statement that no license is granted for the use of the information.

There are two common problems with most of the NDA’s that I’ve observed, to wit:

• Definition of Confidential Information.

Confidential information is frequently defined as literally anything that the Disclosing Party provides the Recipient, whether disclosed orally or in writing. That’s far too broad. Read literally, it could potentially include the lunch plans for the parties, which is crazy.

The better approach is to require that only information disclosed in writing and bearing a “confidential” or “proprietary” legend is covered. Oral or verbal disclosures are not. Should information be inadvertently conveyed without such a legend or orally, the Disclosing Party must promptly advise the Recipient in writing that it intends to have such information covered. Without a clear delineation of what is confidential and what is not, the Recipient has no way of knowing what it must protect and refrain from using and what information it can freely use.

• Post-Termination Obligations.

Virtually all NDAs address how the Recipient must deal with the confidential information it receives after termination. In most instances, they provide that the Recipient must either return or destroy such information. The problem with such a provision is that should a dispute ever develop between the parties; the Recipient cannot adequately defend itself from a breach claim because it no longer has access to such information. That puts the Recipient at a severe disadvantage in any litigation since it must rely on the “good faith” of the other party. The better approach is to provide that the Recipient may retain an archival copy of such confidential information and agree to hold it in confidence or allow its counsel to keep it under similar conditions.