Lengthy contracts will cause the heat death of commerce

Judging by the number of comments it attracted, this article from four years ago was popular. Shorter contracts, please!

IP Draughts

heat deathThere is a theory, partly attributed to the nineteenth-century scientist Lord Kelvin, that the increasing entropy of the universe will eventually lead to its heat death.

IP Draughts is currently conducting experiments that may lead to a new theory of commerce: that the increasing length of contracts will eventually lead to the heat death of the business world. A time will come when all available energy for business activities is diverted into the negotiation of overly-complex contracts; when the underlying business activities must inevitably cease, modern civilisation will freeze, and we will revert to an agrarian economy in which concepts such as intellectual property become meaningless.

On IP Draughts’ desk is a draft publishing agreement that he has been asked to sign. It is for the fourth edition of one of his books. His contact at the publishing house has helpfully highlighted the changes that are proposed over…

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More than one way to cook sole

Blog articles can only be reposted once, it seems, at least on WordPress. That’s a shame, as IP Draughts would or like to re-repost his evergreen 2012 article, Exclusively for Everyone: Oxymorons are Us. The article discusses the meaning of sole and exclusive. Instead, here is a later article that chews over some related issues.

IP Draughts

waspLike wasps returning to an abandoned glass of beer, IP Draughts and his drafting buddies are drawn, time and again, to the subject of sole and exclusive licences.  Recently (and not for the first time) the Koncise Drafter swarmed over the subject.  The IPKat has sniffed at the question of sole licences.  Earlier this year, IP Draughts buzzed on about the difference in meaning between sole and exclusive.

IP Draughts has two excuses for returning to the subject now.  First, he has recently been advising a novelist, who has signed a publishing agreement with a reputable fiction publisher.  Clause 1 of the agreement includes the following wording:

…the Author grants to the Publishers …the sole and exclusive right and licence to print, publish, sell, store, reproduce, distribute and make available to the public the Work …

quirkyFor some unknown reason, the last 6 words of clause 1 (“in all languages…

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CDAs and liquidated damages

Since this article was posted, two and a half years ago, IP Draughts has seen more of these pervasive 10,000 Euro penalty clauses in civil law CDAs. He continues to resist them.

IP Draughts

panicConsider the following clause, which is taken from a template confidentiality agreement that can be found quickly on the internet.

Liquidated Damages. In case of unauthorized use or disclosure of the Confidential Information, the Disclosing Party shall be entitled to liquidated damages in the amount of €10 000 (ten thousand Euro) for each such use or disclosure.

Notwithstanding the right to liquidated damages, the Disclosing Party has the right to take any measures available and to claim and receive a higher amount of compensation if the Disclosing Party can prove that the actual damage sustained will exceed the amount of liquidated damages.

IP Draughts has seen variants of this wording in a significant minority of CDAs over the last decade. Typically, the CDA has been drafted by a lawyer in a civil law jurisdiction, rather than a common law jurisdiction. The above example appears in an agreement used by…

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Law faculties: pure or applied?

Last week, IP Draughts greatly enjoyed attending the UCL Laws graduation ceremonies at the Royal Festival Hall, in London. He was honoured to lead the academic procession on to the stage, but realistic enough to know that his surname starting with an A had something to do with it!

He now regrets his choice of university, 40 years ago. The ceremonial hood of a BA (Law) of Durham University involves a large amount of white ermine, which may be more suited to medieval winters in the north of England than to July in London in the present era.

At a dinner of the law faculty and guests after the ceremonies, IP Draughts found himself in two separate conversations that seemed mutually exclusive. In the first, an academic was arguing that research in academic law was all about ideas, and he was surprised that some of his colleagues focussed on “doctrinal” law. He assumed that the latter’s work was relevant to practitioners (by implication he seemed to think it was of less interest to the legal academy). This prompted some discussion on how academic thinking about doctrine helped to inform the judiciary and indirectly seeped through into court decisions.

This academic showed polite interest when IP Draughts argued that university law faculties should go much further in the direction of addressing practitioner needs, and that focussing on judges and cases was a small part – the visible part of the iceberg – of the professional skills and knowledge of legal practitioners.

The academic reflected on the fact that (in IP Draughts’ words) many of the people that he taught went into large, City law firms where they performed repetitive work, and where thinking about the law formed a very small part of their professional lives. This academic seemed to view the work of most practitioners as very remote from his interests.

The discussion moved on, but IP Draughts could have commented that many of his colleagues didn’t even have law degrees, and had studied law in a compressed course at the College of Law (now University of Law) or similar institution. During their professional lives many of them developed a deep knowledge of their area of law.

Later in the dinner, IP Draughts had a conversation with another UCL Laws academic who had a different perspective. She had worked in private practice for a decade before changing career, obtaining a PhD, and becoming a law academic. She seemed to agree with IP Draughts’ argument that research and teaching on subjects of interests to law practitioners could be just as academically rigorous as some of the “purer” areas of legal research; that academic law faculties should embrace this type of work; and that some said they did, but in reality what counted in the faculties was the traditional type of legal research. Where the law department formed part of a faculty of social sciences, this problem was exacerbated, as the priorities of sociologists in the faculty influenced faculty thinking.

While these conversations were going on, Venn diagrams were forming in IP Draughts’ fevered brain (it was a hot day). The following categories reflect what happens in England Wales. IP Draughts is aware that legal-qualification providers, such as the University of Law, may not exist in other jurisdictions.

First the current arrangements:

An outward-looking law faculty such as UCL’s conducts research and teaching across both pure and applied subjects. There is some overlap with qualification providers, e.g. it provides the main course for qualifying as a notary in England. There is some overlap with professional training providers, e.g. it runs IP Draughts’ public courses. But these are very much secondary activities and not part of the core focus of the law faculty.

Next, a structure that would seem to be the logical consequence of the ideas expressed by the first academic mentioned above.

Finally, what IP Draughts would like to see:

Some leading law faculties may believe that they are already in this third category. In IP Draughts’ view, a way of verifying this would be to count how many full professors they have in each of the three broad categories of pure, applied and practice-based. While he wouldn’t want to be too rigid about this, a quick rule of thumb might be to see one third of the law faculty’s professors in each category. He suspects that it will be long time before this happens in a majority of leading law faculties.


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