Negotiating Technology Transfer and Licensing Agreements: Structuring Key Provisions, Avoiding Drafting Pitfalls

Description

Companies increasingly rely on new and improved technology to remain competitive, drive operational efficiencies and increase profits. Often businesses acquire rights in such technology from a third party via an agreement that governs the use of certain intellectual property rights that are embodied in or otherwise used by this technology, or that may be implicated through the use of this technology. While technology transfers present financial opportunities for both parties, they involve legal risk, such as the potential for IP infringement or the failure of related services to provide the expected value.

Strategically negotiated technology transfer and licensing agreements can help minimize the risks inherent in technology transfers. Counsel should include provisions that define the particular IP rights being licensed or sold, protection of any rights that the owner or licensor will retain, ownership of any jointly developed IP, rights to improvements, indemnification obligations, obligations to assert retained rights, limitations on liability, and other key clauses in the agreements to establish each party’s rights and obligations and minimize the potential for future disputes. To the extent that related services will be provided in connection with the technology transfer or license (e.g., maintenance services), counsel should include provisions that ensure that the expected quality of services are delivered.

By understanding the critical elements to include in agreements—and the common pitfalls—technology and business counsel can effectively draft and negotiate an agreement in their clients’ best interests.

Listen as our authoritative panel examines technology transfer and licensing agreements, including standard clauses and common pitfalls. The panel will offer best practices for structuring the agreements to protect client interests.