When is a licence not a licence? When it’s a covenant not to sue?

Golden oldie number 3 – this subject prompts much discussion!

IP Draughts

alligatorsDear reader, IP Draughts needs your help with some research.  He has volunteered to give a short talk  on the differences (if any) between an intellectual property licence and a covenant not to sue. The talk will be held at the London offices of Olswang on Tuesday 19 February at 5pm.  Registration details here.  IP Draughts is sure that the readers of this blog will be able to shed light on this puzzling subject.

The expression covenant not to sue is sometimes seen in IP agreements, but when you examine the detailed wording of the clause in which the term appears, it often looks very much like a licence.  The expression seems to originate in US agreements to settle IP litigation, but it has spread to some non-contentious agreements.  Here is an example, taken from Drafting Patent License Agreements (Brunsvold et al, BNA Books, 6th edition at page…

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