A few practice points on drafting licences

When you draft a detailed IP licence agreement, or review someone else’s draft, numerous points of detail will probably need to be considered. Here are some points that came up during recent discussion of a draft licence agreement. They are not the most important issues in a typical licence agreement, but they illustrate how much thought the experienced drafter is likely to put into the wording.

The examples below are all concerned with the wording of the grant clauses.

  1. In an exclusive licence agreement, do you need to say “exclusive (even as to the licensor)…“? The words in italics are intended to clarify that the licence is exclusive rather than sole, as those expressions are commonly understood. In IP Draughts’ view, these words are unlikely to be necessary in the vast majority of cases, but if a client asks for them he will probably put them in.
  2. Does licence grant wording need to refer to granting a “right and licence”? IP Draughts thinks it is sufficient simply to grant a licence, unless there are special circumstances (e.g. if a joint owner permits the other joint owner to exploit on an exclusive basis, there is an argument for calling this a right). But he probably wouldn’t cross out the extra words from someone else’s draft.
  3. If the licence agreement states that the licensee is permitted to sub-license, should the relevant wording refer to multiple layers of sub-licensing (eg allowing sub-sub-licensing), if this is intended? Probably yes, to avoid uncertainty.
  4. Is there any advantage in saying that a licence is “perpetual and irrevocable” if it goes on to state that is subject to clauses allowing termination for breach or insolvency, and the agreement has a clause stating that, on expiry of the royalty term, the licensee has a continuing non-exclusive licence to use the licensed know-how? Probably not, in IP Draughts’ view.

Multiply these points by the number of clauses in a typical, detailed licence agreement, and you end up with dozens of points of drafting detail. Some of these points have immediate commercial significance, some are points of interpretations that may lie undisturbed until the parties have a dispute, and some are just points of drafting style, which reflect the considered choices of the drafter. The experienced drafter will have a mental checklist of drafting issues for clauses that they commonly encounter.


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Who owns copyright in an academic’s work?

This golden oldie popped up in the statistics of recently read articles on this blog. Dr Rahmatian is now a professor of commercial law at the University of Glasgow and has written further published articles on IP subjects, at least some of which assert that he owns the copyright in them!

IP Draughts

butterflyRegular readers of this blog will know that IP Draughts is sceptical about the value of some of the articles in academic law journals. Too many of them seem to be engaged in a private conversation between academics that has very little connection with the world that IP Draughts inhabits.

A recent article in Legal Studies, the journal of the Society of Legal Scholars (SLS), bucks this trend. Make the butterflies fly in formation? Management of copyright created by academics in UK universities, by Dr Andreas Rahmatian of the University of Glasgow (Legal Studies Vol 34 No 4, 2014, pp 709-735) makes some interesting points about the ownership of copyright in works created by an academic employee. Not only are the points interesting, but they have practical relevance to anyone who is involved in drafting, interpreting or advising on IP ownership issues within a university. It is to SLS’s credit…

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Efficient and effective use of the university contracts manager

Picture the scene. You are responsible for reviewing hundreds of draft research-related contracts on behalf of your university (or other public body, eg NHS Trust). You don’t have time to do a “Rolls-Royce job” on all of them.

You are expected to manage as best you can, with the resources available. You are under pressure to get the contracts quickly through to the stage of signature, and to keep your academics happy. You also have a responsibility to protect the university’s interests in the terms that are negotiated. But you don’t have a list of “deal-breaker” terms that the university can never accept. Or if you do, the list is expressed in sufficiently vague terms that it leaves you room for manoeuvre. And anyway, the terms proposed by industry are sometimes complex, and don’t fit into neat boxes in the way the list suggests.

You can refer difficult points “upstairs” to your boss, but he or she has less experience of detailed contract terms than you do, and their boss is even more naive on this subject. Past experience tells you that they don’t always give you clear guidance, and don’t always support you if the academic pushes for the contract to be signed, however imperfect it may be. Part of the “problem” as you see it, is that the university doesn’t have much experience of legal disputes where the terms of a contract affected the outcome of the dispute, so there is perhaps an institutional assumption that the terms aren’t that important. You rightly point out that a remote risk of a major catastrophe deserves to be managed properly, and people nod when you say this, but you can see that they aren’t really that interested. Identifying, managing and taking responsibility for legal risk is an alien concept within many universities.

This combination of circumstances may lead to sub-optimal management of contracts. Or, put another way, you apply a sniff-test to them, and point out major and obvious issues, but pressure of time prevents you from giving each agreement a more thorough and rigorous review. And anyway, it is difficult to get clear information from the academic department about the underlying facts, risks, strategy, etc.

One way of dealing with this issue (and IP Draughts has seen others, including getting the department head or dean to formally sign-off on contracts that don’t comply with the university’s standard approach) is for the contracts manager to undertake a triage exercise, in which each contract that comes in to the university is formally placed in one of three categories, namely:

  1. Major importance (e.g. because of financial value or risk) – these contracts should be dealt with thoroughly.
  2. Medium importance – these contracts should be given a light-touch review.
  3. Minor importance – these contracts should either be on standard university terms, without negotiation, or left to the department to negotiate if they wish, or the department should confirm that they are happy to accept any risks that arise. Either way, the contracts manager should not be required to devote valuable resources to negotiating them.

For this approach to work:

  1. There need to be clear criteria under which the triage process takes place, and preferably the academic department is involved in agreeing the categorisation of each agreement.
  2. The contracts managers need to have sufficient resource to deal with the resulting workload, particularly for contracts of major importance.

IP Draughts really feels for the contracts manager who doesn’t get clarity from their superiors as to what they are expected to do with the limited resources available. Sometimes, a solution is to get some training, not for the contracts manager in this case (though all of us benefit from training) but for their superior who is supposed to manage and guide the contracts manager, and take the difficult decisions that are referred up to them.

Do readers have their own solutions to these problems?


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10 reasons not to become a lawyer

By all accounts, Thomas More was a good lawyer and good trade negotiator in Europe (a skill that we need now) but was less successful dealing with his boss.

In the last few days, there has been a discussion on LinkedIn about how difficult it is to qualify and practise as a lawyer, and how certain individuals have been successful despite the strong advice they received from careers advisers  and others to avoid this path.

IP Draughts’ view is that is important to be realistic about one’s chances. And about the opportunities that a legal qualification may provide, even if the career path doesn’t end up with you becoming President of the Law Society or Chairman of the Bar Council.

IP Draughts recalls the very strong advice he and others received, as students, to avoid the Bar. Often this advice was from practising barristers. The underlying message seemed to be that the chances of becoming a successful barrister were very low, and unless you were extraordinarily talented and had enormous reserves of resilience, you should find an alternative career path. The advice was kindly meant, but usually ignored, including by IP Draughts.

The statistical unlikelihood of becoming a practising barrister was emphasised during IP Draughts’ Bar Finals year (now the BVC), when approximately 1,500 students were crammed into a building off High Holborn that was designed, so he was told, for 1,000. The 1,500 had already survived one whittling process, as the numbers applying to the Inns of Court School of Law were a large multiple of the numbers accepted. At the time (the early 1980s) only a small number – a few dozen? – of the people who completed the Bar Finals course were taken on as tenants in chambers each year.

Recent complaints about the law schools taking money off students who have no hope of qualifying seem to imply this is a recent phenomenom. IP Draughts’ experience is that it has been going on for generations, at least on the barrister side of the profession.

The Bear Garden, part of the Royal Courts of Justice

As it turned out, IP Draughts was successful in obtaining a pupillage, after interviews with several chambers. He just ‘clicked’ with the barrister who was interviewing him, on a day when he (IP Draughts) was on good form. Probably rightly, the chambers didn’t offer him a tenancy at the end of his 12-months pupillage. Although he received some good feedback about his written work, and generally got on well with clients, he wasn’t sufficiently comfortable in his own skin for the performance levels required in court, in chambers, and in the clerks’ room (the biggest bear pit of all). About half of the pupils in IP Draughts’ chambers obtained tenancies, some in other chambers after further periods of pupillage.

The contrast, when IP Draughts obtained a job in industry at the end of his pupillage, was astonishing. Overnight, he went from being a junior know-nothing to the in-house legal expert. Three years later, there was another major shift, when he joined a firm of specialist IP solicitors.

With these experiences in mind, IP Draughts offers the following 10 reasons not to become a lawyer and, in some cases, not to spend money on obtaining legal qualifications. (The money was less of an issue in IP Draughts day: first degrees were free of charge, and the Scottish Education Department exercised their discretion to pay for IP Draughts’ Bar Finals course to qualify as an English barrister, for which – 35 years later – he remains both surprised and grateful.)

The purpose of this list is not to dissuade anyone from pursuing a legal career, but rather to ensure that the would-be lawyer goes into the process with their eyes fully open to the risks. If you are new to the legal world, some of these points may not be obvious.

  1. Are you bright enough and can you look objectively at yourself? Sorry, but it has to be said: hard work is not enough. You need to be bright – well above the average for graduates. You also need to be clear-headed and objective in assessing whether your level of intelligence is sufficient for success as a lawyer, particularly in the areas of comprehension, reasoning, analytical and communication skills. Many people find it hard to be objective; if you can’t do this, you are unlikely to make a good lawyer. As this blog has previously commented, many job applicants don’t seem to have the requisite skills.
  2. Do you care the right amount about the law? If you intend to practise as a laywer, it is important to be interested in law as a subject, but also to regard it as a professional ‘tool of the trade’ for providing a professional service, rather than an end in itself. It is essential to understand and uphold the ethical and professional standards of the legal profession. But too much interest in law for its own sake can get in the way of providing a professional service. If you want to be a ‘pure’ lawyer you may need to go into academia or find a role where the law itself is the central focus, eg working for the Law Commission. Equally, if you just want to earn lots of money and couldn’t care less about the law as a subject, becoming a lawyer is probably not the best route to follow.
  3. Are you comfortable with process work? There are several trends. Increasingly, legal jobs are becoming automated, e.g. law firms use office templates for contracts much more than when IP Draughts qualified. And some legal jobs are all about the process, with limited scope for pure legal work. Whether in the field of M&A, conveyancing, company formation or financing transactions, many law firms make their money from their reputation in following a process, rather than for their legal expertise. IP Draughts has been accused of practising as an artisan, as though (to follow an analogy) making individual, hand-crafted loaves of bread is a quaint irrelevance in the 21st century, compared with the mass market, factory-production of sliced white. But even he gets involved with work where processes are important, eg in the field of data protection. Newbie lawyers need to be okay with following processes, or find themselves a niche where this is less important.
  4. Are you comfortable working in a hierarchical environment? Nowadays the world of law is not quite as rigidly hierarchical as in the famous Class sketch from the 1960s. But there are still areas where it is expedient to “know one’s place”. When IP Draughts first started in practice, if a partner and associate attended a client meeting, it was not unusual for the associate to be entirely silent for the entire meeting. Some clients expect to deal with a partner. Some lawyers are, regrettably, very old-fashioned in their social attitudes. Some judges are unpleasant to counsel and ‘put them down’. It gets better over time, but some of these attitudes remain. You don’t have to be like that, but you need to be able to cope with that type of environment, if you encounter it.
  5. Can you work with other lawyers? Linked to the above point, are you comfortable working with other lawyers, including judges before whom you may appear in court? IP Draughts has found that, in general, IP lawyers are a good bunch of people, probably better to deal with than the average lawyer. But some are hard work.
  6. Can you work with (non-lawyer) clients? In his brief career as a barrister, IP Draughts found that he was better at working with clients in the corridor outside the court room than in standing up in court before the judge and arguing his case. Nowadays, with greater experience and maturity, he is comfortable dealing with most people. Depending on what your legal role is, you may have more or less exposure to commercial or private clients, or to other lawyers and judges. Are you good at dealing with non-lawyers? If not, certain areas of law will not be good for you.
  7. Do you have enough stamina and resilience? You may have to fail a few times in your chosen ambitions, and move on, before you achieve what you want and what you are suited to do. Some people sail into their chosen careers but most of us do not. There are more forgiving environments than the law. And in some legal work environments you may find yourself stretched to the limit, in terms of the amount of work you are asked to do. For example, US law firms have a reputation for paying well but pushing their junior lawyers to their limits. Do you have enough stamina and resilience for the law?
  8. Can you afford to become a lawyer? Nowadays, students take on debt when undertaking university and vocational courses. There is no point in doing so unless either (a) you have a real vocation for becoming, in this case, a lawyer, or (b) you will make enough money in practice to make a decent return on your investment. Which leads on to:
  9. Will you make enough money? The range of earnings of lawyers is large – much larger, say, than that of airline pilots who are mostly within a fairly narrow band. You may be earning less than the minimum wage, trying to keep a small legal aid practice afloat, or you may be a millionaire partner in a leading City law firm. Most of us are somewhere between the two, nearer the former than the latter. If you are at least partly motivated by money, what are the chances of being well-off? The public perception of lawyers’ incomes is often very ill-informed.
  10. If law is a qualification rather than a career, are there better alternatives? If you are planning to qualify as a lawyer but not practise as one, why do you want to qualify as a lawyer? Are there alternatives that may be more suited to your circumstances or make you more attractive to an employer, e.g. in some cases, doing an MBA? The traditional status of a legal qualification may not count for much in (some parts of) the modern world.





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