Chapter 19:PROTECTING IP RIGHTS: SETTLEMENT MEMORANDUM

CHAPTER 19

Protecting IP Rights: Settlement Memorandum

WHETHER LEGAL PROCEEDINGS AGAINST A SUSPECTED INFRINGEMENT have commenced or are merely threatened, the parties involved would be wise to try to settle the dispute amicably. If legal proceedings are brought, the parties will incur substantial expenses for attorney fees, court costs, investigative and discovery costs, and other litigation related expenses. They are also likely to suffer harm to their reputation among consumers and industry traders, loss of sales, loss of production, and potentially loss of the business. Settlement negotiations can take time, but they are usually accomplished in private without harmful publicity. The following Memorandum is not a full-fledged Settlement Agreement. It is merely the first agreement put into writing by two parties who have negotiated the basic terms of a settlement. By preparing a Memorandum, the parties can concentrate on the most significant, core provisions of the settlement. Once the basic settlement is agreed, the relationship of the parties will be determined and they can proceed with conducting their business while they wait for the attorneys to prepare and finalize a complete Settlement Agreement with all the nuances and subtleties of a detailed contract.

Settlement Memorandum

THIS SETTLEMENT MEMORANDUM SHALL TAKE EFFECT AS OF [date] BETWEEN [name and address] (FIRST PARTY) AND [name and address] (SECOND PARTY). THE PARTIES ACKNOWLEDGE THE FOLLOWING:

a. The First Party has rights to Intellectual Property as stated in this Memorandum and is seeking to protect those rights. b. The Second Party has used and/or registered intellectual property similar to the

Intellectual Property claimed by the First Party, but the Second Party is not admitting to any illegal or infringing use of said Property by signing this Memorandum or otherwise by entering into settlement with the First Party.

ACCORDINGLY, THE PARTIES AGREE TO THE FOLLOWING TERMS AND CONDITIONS:

1. INTELLECTUAL PROPERTY THE FIRST PARTY OWNS ALL RIGHTS IN THE FOLLOWING INTELLECTUAL PROPERTY: [list particulars, INCLUDING NAME OR TITLE, REGISTRATION NUMBERS, AND OTHER IDENTIFYING INFORMATION]. 2. NO RIGHTS THE SECOND PARTY CLAIMS NO RIGHTS WHATSOEVER IN ANY OF THE INTELLECTUAL PROPERTY OWNED BY THE FIRST PARTY, NOR IN ANY IDENTICAL OR SIMILAR INTELLECTUAL PROPERTY.

3. DISCLOSURE AND TRANSFER OF IP REGISTRATIONS THE SECOND PARTY HAS DISCLOSED TO THE FIRST PARTY ALL OF THE SECOND PARTY’S PENDING APPLICATIONS AND ISSUED REGISTRATIONS OF INTELLECTUAL PROPERTY THAT IS SIMILAR OR IDENTICAL TO THE INTELLECTUAL PROPERTY OF THE FIRST PARTY. THESE APPLICATIONS AND REGISTRATIONS ARE LISTED IN SCHEDULE A ATTACHED TO THIS MEMORANDUM. WITHIN FOURTEEN (14) DAYS OF THE EFFECTIVE DATE OF THIS MEMORANDUM, THE SECOND PARTY SHALL APPLY TO ALL REGISTRIES TO ABANDON OR CANCEL SUCH APPLICATIONS OR REGISTRATIONS, OR ON WRITTEN REQUEST OF THE FIRST PARTY, TO TRANSFER THEM TO THE FIRST PARTY. THE SECOND PARTY SHALL PROVIDE THE FIRST PARTY WITH CERTIFIED RECEIPTS SHOWING THAT THE APPLICATIONS AND REGISTRATIONS HAVE BEEN ABANDONED, CANCELLED, OR TRANSFERRED.

4. DISCLOSURE AND TRANSFER OF COMPANY AND TRADE

REGISTRATIONS AND NAMES THE SECOND PARTY HAS DISCLOSED TO THE FIRST PARTY ALL REGISTERED AND UNREGISTERED COMPANY AND TRADE NAMES THAT THE SECOND PARTY HAS USED AND THAT ARE SIMILAR OR IDENTICAL TO THE INTELLECTUAL PROPERTY OF THE FIRST PARTY. THESE NAMES AND REGISTRATIONS ARE LISTED IN SCHEDULE B ATTACHED TO THIS MEMORANDUM. WITHIN FOURTEEN (14) DAYS OF THE EFFECTIVE DATE OF THIS MEMORANDUM, THE SECOND PARTY SHALL SELECT A NEW COMPANY AND TRADE NAME THAT HAS NO RELATION OR LIKENESS TO THE INTELLECTUAL PROPERTY OF THE FIRST PARTY WHATSOEVER. WITHIN THIS SAME TIME, THE SECOND PARTY SHALL APPLY TO ALL REGISTRIES TO ABANDON OR CANCEL ITS REGISTRATIONS OF SUCH NAMES, AND FURTHER SHALL BEGIN TO ELIMINATE THEIR USE AND APPLICATION OF SUCH NAMES AS REQUIRED WITHIN THIS MEMORANDUM. CERTIFIED RECEIPTS SHOWING CANCELLATION OR ABANDONMENT SHALL BE PROVIDED TO THE FIRST PARTY.

5. NO USE OF SIMILAR OR IDENTICAL PROPERTY AS OF FORTY-FIVE (45) DAYS FROM THE EFFECTIVE DATE OF THIS MEMORANDUM, THE SECOND PARTY SHALL HAVE CEASED MANUFACTURING, PRODUCING, APPLYING, FORMULATING, REPRESENTING, SELLING, PROMOTING, ADVERTISING, OR OTHERWISE USING IN ALL RESPECTS ALL INTELLECTUAL PROPERTY THAT IS SIMILAR OR IDENTICAL TO THE INTELLECTUAL PROPERTY OF THE FIRST PARTY.

6. DESTRUCTION OF SIMILAR OR IDENTICAL PROPERTY AS OF FORTYFIVE (45) DAYS FROM THE EFFECTIVE DATE OF THIS MEMORANDUM, THE SECOND PARTY SHALL OBLITERATE ALL INTELLECTUAL PROPERTY THAT IS SIMILAR OR IDENTICAL TO THE INTELLECTUAL PROPERTY OF THE FIRST PARTY. THIS ACTION MUST BE TAKEN, WITHOUT LIMIT, IN RESPECT OF [describe depending on type of intellectual property, E.G., ALL PROCEDURES AND

METHODS USED BY THE SECOND PARTY OR ALL LITERARY WORKS PRODUCED, SOLD, OR OTHERWISE USED BY THE SECOND PARTY OR ALL NAMES AND SIGNS THAT APPEAR ON ALL REAL ESTATE, INCLUDING WITHOUT LIMIT BUILDING FIXTURES, AND ON ALL ARTICLES IN THE SECOND PARTY’S POSSESSION OR OTHERWISE AVAILABLE FOR THE SECOND PARTY’S USE, INCLUDING WITHOUT LIMIT ALL OF THE SECOND PARTY’S TRADE LISTINGS, ADVERTISING, PROMOTIONAL MATERIALS, SIGNS, PANELS AND BILLBOARDS, STATIONERY, BUSINESS CARDS, LABELS, INVOICES, RECEIPTS, PACKAGING, BAGS, CONTAINERS, DESK AND COUNTER PENCIL CANS, NOTEPADS, CALENDARS, AND OTHER ACCESSORIES, PRINTING PLATES, STAMPS, AND SIMILAR EQUIPMENT]. 7. NO REPRESENTATION AND NO INTERFERENCE FROM THE EFFECTIVE DATE OF THIS MEMORANDUM, THE SECOND PARTY SHALL NEVER REPRESENT NOR IN ANY WAY HOLD OUT TO ANY PERSON WHATSOEVER THAT THE FIRST PARTY OWNS OR IN ANY WAY IS CONNECTED OR ASSOCIATED WITH THE

SECOND PARTY. FURTHERMORE, THE SECOND PARTY SHALL NEVER OPPOSE OR INTERFERE WITH ANY OF THE FIRST PARTY’S PENDING APPLICATIONS FOR THE REGISTRATION OF ITS INTELLECTUAL PROPERTY, NOR SHALL IT EVER SEEK CANCELLATION OF SUCH REGISTRATIONS.

8. FORMAL AGREEMENT THE PARTIES INTEND THAT THIS MEMORANDUM WILL BECOME THE BASIS OF A FORMAL AGREEMENT OF SETTLEMENT BETWEEN THEM. THIS MEMORANDUM CONTAINS THE MOST SIGNIFICANT PROVISIONS OF THEIR AGREEMENT. ANY ADDITIONAL PROVISIONS THAT MAY BE ADDED TO THE FORMAL AGREEMENT OF SETTLEMENT BETWEEN THE PARTIES SHALL NOT IN ANY WAY WHATSOEVER MODIFY THE PROVISIONS OF THE MEMORANDUM WITHOUT THE EXPLICIT CONSENT OF BOTH PARTIES IN WRITING.

9. CONFIDENTIALITY THE PARTIES AGREE AND UNDERTAKE NOT TO DISCLOSE ANY TERMS AND CONDITIONS OF THEIR MEMORANDUM AND OF THEIR FORMAL AGREEMENT OF SETTLEMENT, AND THEY SHALL KEEP THE TERMS CONFIDENTIAL.

10. COSTS EACH PARTY SHALL BEAR ITS OWN COSTS, CHARGES, AND EXPENSES RELATING TO THIS SETTLEMENT.

11. CONSIDERATION IN CONSIDERATION OF THE UNDERTAKINGS BY THE SECOND PARTY IN THIS MEMORANDUM, THE FIRST PARTY AGREES TO DISMISS ANY LEGAL PROCEEDINGS THAT MAY HAVE BEEN COMMENCED AND FURTHER AGREES TO WAIVE ALL CLAIMS THAT THE FIRST PARTY MAY HAVE HAD AGAINST THE SECOND PARTY. HOWEVER, THIS AGREEMENT AND WAIVER SHALL NOT AFFECT ANY FUTURE CLAIMS THAT THE FIRST PARTY MAY HAVE, NOR SHALL IT AFFECT THE FIRST PARTY’S RIGHTS IN THE EVENT THAT THE SECOND PARTY BREACHES THIS MEMORANDUM OR THE FORMAL AGREEMENT OF SETTLEMENT.

12. COOPERATION THE PARTIES AGREE TO DO ALL THINGS AND EXECUTE ALL DEEDS, INSTRUMENTS, TRANSFERS, OR OTHER DOCUMENTS AS MAY BE NECESSARY OR DESIRABLE TO GIVE FULL EFFECT TO THE PROVISIONS OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED.

IN AGREEMENT AND UNDERSTANDING, THE PARTIES NOW SIGN AND DATE THIS MEMORANDUM BELOW.

FIRST PARTY: [Company Name] BY [signature of authorized representative] [typed name and title] [date]

SECOND PARTY: [Company Name] BY [signature of authorized representative] [typed name and title] [date]