CHAPTER 8
Ensuring Precise Contractual Protection of IP Rights TO THE EXTENT POSSIBLE,
you should protect your IP rights through clear and concise contract provisions. Regardless of whether you are the IP owner or the IP user (consumer, licensee, assignee, franchisee, or otherwise), the best means of ensuring that your intent is carried out is by specifically stating your intentions within an agreement. Do not rely on statutory or judicial implications and interpretations because these will not necessarily reflect your will. In any agreement, it is impossible to cover every possible contingency that might arise. Nevertheless, you should try to draft contract provisions that are clear and that anticipate as many situations as possible. The more definitive the terms, the fewer the disputes will arise and the less expense you will incur in resolving conflicts. Use precise language and avoid legalistic terminology whenever possible, particularly if some of the parties do not speak your language fluently. The following contract clauses are from a software license. They are not intended to fit your particular IP situation, but rather to give you practice in finding ambiguities and tightening up phrases. Many of the concepts mentioned relative to the software publisher (licensor) and the consumer (licensee) can be taken in a more general context. It is essential to prepare a contract within the circumstances of your own IP situation and not to rely on standard forms or clauses. The following clauses should serve to clarify some of the points your attorney may make and to suggest why your attorney has included certain standard provisions in your agreement.
Provisions of License Agreement (Computer Software) FORMATION OF THE CONTRACT ■ POOR PROVISION:
[Company Name ] is licensing (not selling) [Software Name ] (“Software”) to you. A N A L Y S I S : A contract is formed when each party clearly manifests intent to be bound by the terms that are mutually understood. Typically, this intent is shown by both parties signing the contract. However, a license agreement for a consumer product, such as software, is not likely to be signed by both parties because of the nature of the transaction. Instead, the contract is considered formed when one party (the company) offers the product to the other party (the consumer), who accepts by taking unilateral action (opening the software package). The provision here states the offer by the company, but it leaves the acceptance to implication. Does the mere purchase of the software imply acceptance of the license terms? Is there an acceptance of the contract terms even if the consumer
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