1. Licensing

2. Some Nuggets...WIPO Data US IP value = $5-$5.5 trillion or more
$ B in revenue annually
$2.8B in 1970; $27B in 1990
US IP exports = 45%-60% of total exports
35-40% of US GDP (U.S. Market value)
$1.2+ trillion invested into R&D
In 2015, 589K patents (50% granted) 52% granted to non-residents; 870K® in US
30%+ of U.S. jobs relate to IP

5. Licensing Basics What is a license? A GRANT!
A grant by IP owner for someone else to use IP. A CONTRACT!!!
When we buy a DVD, software, MP3, book, etc. we are paying a licensing fee for IP and cost for any physical production
All media industries are based on licensing
Licensor: owner of IP who grants license
Licensee: party that licenses the IP
Assign: outright sale or transfer of IP

6. Types of Licensing Agreements
Exclusive: all but ownership. Usually deprives licensor the right to use IP.
License granted at exclusion of all others
(preferable for a licensee)
UO® and Nike® for “O” on all headwear/apparel
Non-exclusive: permission to use property in limited manner (markets, products, etc.)
(preferable for a licensor)
Sole: a hybrid license. Exclusive, but allows licensor to ALSO use IP

8. Software Licenses We NEVER buy software, we license
“Shrink-wrap license”: when you break the wrapping you are agreeing to the license
“Click-wrap license”: by clicking “I agree” you accept terms of the license (iTunes!)
“Webwrap”: when you download the software you agree to the accompanying terms of license
Software companies use these license to prevent reverse engineering

9. The Agreement
You Agreed?

10. Royalties
Income generate by licensor, or revenues collected by artist (in film “residuals”)
“Paid up”: lump sum payment
“Running royalties”: periodic payment based upon sales
Cross License: no royalties, but two parties “pool” their IP instead of licensing or suing
i.e. Edison Trust or Blu-Ray
Based on value of IP in new technology (for patent, about 5% US; less in other countries)

11. In Action
In patent: you license the right to use the patented idea in another product/innovation
In trademark: you license the right for the use of your mark on other “products.” Must be diligent to maintain mark.
In copyright: you license any or all of the RP3Ds

12. Compulsory Licenses Aka “Statutory license”
Comes from 1909 Copyright Act
Both patent and copyright
Don't need expressed consent from IP owner
Must provide notice to IP owner and pay a set royalty % based on “sales”

13. Mechanical License
Paid to songwriters, composers, publishers for the right to make a recording of their lyrics/composition
Compulsory mechanical license: can make a sound recording of a musical work w/out permission
Must already be recorded
Cover version, arrangement, print copies of notation
Cannot change melody or lyrics (moral rights?)
Statutory royalty rate = 9.1-cents (-5 minutes) per copy
24-cents per copy for ring tones

14. Songwriters/Composers/Publishers
Royalty rights:
1) print rights= reprint sheet music
2) mechanical rights= sound recording of work
Harry Fox Agency
3) performance rights= concert, tv/radio, clubs
ASCAP, BMI, SESAC
4) sync rights= sync with visual element
5) digital rights= webcasting, streaming
SoundExchange
DJ food stamp advice: write songs!

15. Master Use License For using a sound recording in another media
Film, television, video game, tv ads, sampling
Negotiated between a record company and potential licensor
Negotiated with whoever owns the copyright of the “master” recording
Up front fee and running royalties

16. Sync License
Any visual paired with sound, hence “sync” or synchronization
Paid to publisher/songwriters/composers NOT record labels (that's a master use)
Can re-record a composition to pair w/ a visual element
Usually lasts for a set amount of time
Royalties are “paid up” not based on sales

18. Most Favored Nations Aka “MFN”
A clause that means that if you license to other parties the terms must be the same or as fair to someone already licensing
It can also mean a 50/50 split between parties involved in the license

19. Contract Bits Contractual Remix Clauses Materials/Contents Release
Injunctive Relief