A Patent License Agreement grants rights to use, manufacture, or sell an invention covered by a patent. This playbook focuses on negotiating royalty structures, field-of-use restrictions, and ownership of improvements.
Why This Matters: Effective dispute resolution provisions ensure timely conflict management, reduce litigation costs, and provide clarity on forum and procedural rules.
Negotiation strategy
If you're the Licensor:
Negotiate for a jurisdiction that offers predictability and enforceability, such as New York. Ensure arbitration rules are favorable and cost-effective.
If you're the Licensee:
Advocate for a neutral jurisdiction that balances fairness and cost. Consider arbitration to avoid lengthy litigation.
Essential elements
1
Governing Law
Specifies applicable legal jurisdiction.
2
Venue
Designates location for legal proceedings.
3
Arbitration
Outlines arbitration process and rules.
Action framework
ACCEPT
Propose edits if the jurisdiction is unfavorable or arbitration rules are not cost-effective.
EDIT
Reject if the clause imposes excessive costs or lacks enforceability.
ADD
Add if the contract lacks clear dispute resolution mechanisms.
PRO TIP
Always ensure the dispute resolution process aligns with your strategic objectives and risk tolerance.
Example clauses
FAVORABLE
Preferred New York Governing Law
"The Agreement shall be governed by and construed in accordance with the laws of New York, without regard to its conflict of law principles."
NEUTRAL
Fallback – Neutral Jurisdiction
"The Agreement shall be governed by and construed in accordance with the laws of [State/Country], without regard to its conflict of law principles."
UNFAVORABLE
"The Agreement shall be subject to applicable laws without specifying a jurisdiction."
High-Risk Projects
Fallbacks
International Contracts
In international contracts, consider arbitration to avoid jurisdictional issues and ensure enforceability across borders.
Small-Scale Agreements
For small-scale agreements, a simple venue clause may suffice to reduce complexity and costs.
Licensing & IPPlaybook Template (Pro both parties )
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