1. David M. Klein Partner 212-318-6318 davidklein@paulhastings.com Building Better Licenses:Building Better Licenses: Common Weaknesses and How to Strengthen Your Agreements Technology Transfer Tactics April 27, 2011

2. www.paulhastings.com ©2011 Paul, Hastings, Janofsky & Walker LLPConfidential - not for redistribution 2 Overview  Key License Terms  Streamlining License Drafting  Streamlining Negotiation

3. www.paulhastings.com ©2011 Paul, Hastings, Janofsky & Walker LLPConfidential - not for redistribution 3 Key License Terms  How Can We Write A License If We Don’t Know What We Are Licensing  What Technology is Being Licensed?  Is the Technology Fixed or Does it Include Licensor Made Improvements?  Exclusive or Non-Exclusive?  Particular Field of Use?  For a Particular Product?  In a Particular Geographic Region?  Can any of the Above Expand or Contract Based on Performance or Other Factors?

4. www.paulhastings.com ©2011 Paul, Hastings, Janofsky & Walker LLPConfidential - not for redistribution 4 Streamlining Licensing – Key License Terms  Who is the Licensee?  Does the License Right Flow to Affiliates or Third Parties Is Sublicensing Permissible and on What Terms  What is the Term of the License? Automatically Renewable? Renegotiation of Royalties at Renewal?  Fixed Fee or Royalty Based?  Are There Minimum Royalties?  Do the Minimum Royalties Adjust Over Time?  Penalty for Failure to Meet Minimums Loss of Exclusivity Termination

5. www.paulhastings.com ©2011 Paul, Hastings, Janofsky & Walker LLPConfidential - not for redistribution 5 Streamlining Licensing – Key License Terms  Audit Rights Financial Other  Quality Control (Trademarks)  Reporting  What are the Key Risks Faced by the Institution and How do we Protect Against Them Warranties Indemnification

6. www.paulhastings.com ©2011 Paul, Hastings, Janofsky & Walker LLPConfidential - not for redistribution 6 Streamlining License Drafting Forms  It was the best of times.... It was the worst of times  Benefits Reduce Drafting Time Better Starting Point for Contract Negotiation May Reduce Negotiation Time Establish Baseline Terms Approved by Business and Legal Reduce Workload of Business and Legal

7. www.paulhastings.com ©2011 Paul, Hastings, Janofsky & Walker LLPConfidential - not for redistribution 7 Streamlining License Drafting Forms  Risks and Downsides Will Only Work For Predetermined Scenarios Use of Wrong Form can cause serious risks Failure to Include all relevant Legal Terms can cause serious Risks Personnel Must be Trained Business and Legal now out of the Loop Tendency to Negotiate in a Vacuum

8. www.paulhastings.com ©2011 Paul, Hastings, Janofsky & Walker LLPConfidential - not for redistribution 8 Streamlining License Negotiation  Negotiation Team Must be Complete... and Prepared Must Fully Understand Content of Form and Negotiating Positions  Must be clear who has Decision-Making Authority  Prioritize the Most Important Issues  Control Drafting Where Possible  Focus on Key Goals and Objectives

9. www.paulhastings.com ©2011 Paul, Hastings, Janofsky & Walker LLPConfidential - not for redistribution 9 Streamlining License Negotiation  If Using Forms, Consider Using a Playbook Contains Forms of Initial Draft Documents Additional Provisions Based on Likely Modifications to Business Terms Likely Positions Taken by Counterparties Responses Acceptable to Business and Legal Pre-Approved Forms of Language Best of Both Worlds