1. Best Practices in Licensing Diane M. Reed Knobbe, Martens, Olson & Bear Rouz Tabaddor Vice President, Chief IP Counsel Corelogic Information Solutions, Inc. Diane M. Reed Knobbe, Martens, Olson & Bear Rouz Tabaddor Vice President, Chief IP Counsel Corelogic Information Solutions, Inc.

2. © 2011 Knobbe Martens Olson & Bear LLP2 Who is the Licensee?  Defining the licensee  Affiliates?  Subsidiaries?  Sublicensees  Patent License  Trademark License: quality control  Software License Open Source issues

3. © 2011 Knobbe Martens Olson & Bear LLP3 Who is the Licensee?  Limiting Assignment of the Licensed IP  Licensee shall not grant, assign, sublicense or otherwise convey or transfer … without Licensor’s prior written consent and any attempted transfer or assignment shall be null and void.

4. Who is the Licensee?  Limiting Assignment of the Licensed IP  Except in connection with the sale or all or substantially all of the assets or business of Licensee, Licensee may not assign or transfer … without Licensor’s prior written consent.

5. Who is the Licensee?  Limiting Assignment of the Licensed IP  Licensor grants to Licensee a non-exclusive, non- transferable (except in conjunction with the sale of all or substantially all of Licensee’s business and assets related to the Project), non-sublicensable, perpetual, irrevocable, right and license to….

6. © 2011 Knobbe Martens Olson & Bear LLP6 Who is the Licensee?  Change in Control  Right to terminate for no cause  Specific termination right: Triggered by any change of control Require notice Licensor can terminate

7. © 2011 Knobbe Martens Olson & Bear LLP7 Who is the Licensee?  Right of First Refusal To acquire the Licensee To buy back the License

8. © 2011 Knobbe Martens Olson & Bear LLP8 Best Practices To Monitor Performance:  Monitoring the Licensee’s Performance  Paying on all Licensed Products?  Accurate royalty statements?  Are expenses properly deducted?  Complying with territorial restrictions?  Complying with market limitations?  Selling competitive products?  Properly using trademarks  Using proper patent marking  Sublicensee compliance?

9. © 2011 Knobbe Martens Olson & Bear LLP9 Best Practices To Monitor Performance:  Typical Auditing Provisions:  Types of records to be kept  How long to keep books and records  How frequently can you audit?  What time period can the audit cover?  Who pays for the audit?

10. © 2011 Knobbe Martens Olson & Bear LLP10 Best Practices To Monitor Performance:  Audit provisions:  What information do you need from the licensee?  How often do you need the licensee to report?  Requirement to keep books and records  How long must records be kept?  Who can inspect?  How often?

11. © 2011 Knobbe Martens Olson & Bear LLP11 Best Practices To Monitor Performance:  Practice Tips  Docket all payment due dates  Establish collection procedures  Keep records of all payments  Track trends in royalty reports  Review licensee press releases and financial reports  Review licensee product literature for new products

12. © 2011 Knobbe Martens Olson & Bear LLP12 Best Practices To Monitor Performance:  Why an Audit Might be Necessary  Royalty calculations are prone to mistakes  Accounting errors  Disagreements about which products are royalty bearing  Disagreements on how Net Sales are calculated  Identify payment deficiencies  Deterrent

13. © 2011 Knobbe Martens Olson & Bear LLP13 Best Practices To Monitor Performance:  Why an Audit Might be Necessary  Avoid statute of limitations  Feedback to improve future license agreements  Improve the licensee reporting process  Better understand how licensed property is used  Good deterrent, but expensive

14. © 2011 Knobbe Martens Olson & Bear LLP14 Best Practices to Avoid Unnecessary Risk  Representations and Warranties  Typical reps and warranties  Ownership  License to IP not owned  Right to grant the license  Validity – knowledge only  No Infringement – knowledge only

15. © 2011 Knobbe Martens Olson & Bear LLP15 Best Practices to Avoid Unnecessary Risk  Reps and warranties to avoid  Patent validity or scope  No infringement  Indemnification and Insurance

16. © 2011 Knobbe Martens Olson & Bear LLP16 Best Practices to Avoid Unnecessary Risk  Patent Marking  Persons found liable for false patent marking “[s]hall be fined not more than $500 for every such offense.”  Any person may sue for the penalty. One-half of the penalties go to the person bringing suit, and the other half go to the U.S.  In Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009), interpreted the statute as requiring penalties be imposed on a per article basis

17. © 2011 Knobbe Martens Olson & Bear LLP17 Best Practices to Avoid Unnecessary Risk  Be very clear about patent marking requirements  Consider indemnification for false marking  Require licensees to police sublicensees

18. © 2011 Knobbe Martens Olson & Bear LLP18 Best Practices to Avoid Unnecessary Risk  Termination rights.  What are the triggers?  What happens on termination?  What if the license is irrevocable?

19. © 2011 Knobbe Martens Olson & Bear LLP19 Thinking About Dispute Resolution  Arbitration/Mediation – cast a broad net to cover all disputes  Disputes related to breach of the agreement  Disputes arising under the agreement

20. © 2011 Knobbe Martens Olson & Bear LLP20 Provisions Unique to the IP Being Licensed  Patent License  License rights under the patent  License rights to make a certain product covered by patents  Is Know-how included?  Ownership of improvements

21. © 2011 Knobbe Martens Olson & Bear LLP21 Provisions Unique to the IP Being Licensed  Trademarks  Quality control  Goodwill  Indemnification

22. © 2011 Knobbe Martens Olson & Bear LLP22 Provisions Unique to the IP Being Licensed  Copyright  Right to create derivative works  Written assignment of newly created works

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