Legal advice in a bearpit

IP Draughts woke up this morning, dreaming/thinking about his experience of conducting multi-party negotiations in Yokohama in about 1989.

He had been sent to a hotel in Yokohama (Tokyo’s port) to represent a trade body in the negotiation of a trade mark licence agreement. The members of the trade body were some of the world’s leading IT companies (hardware and software), and the licence related to use of the trade body’s brand. In effect, use of the brand certified that the licensee complied with certain technical standards in relation to their hardware or software.

The members of the trade body were keen to ensure that the terms of the standard licence were appropriate. The negotiations coincided with an annual meeting of the members.

IP Draughts was due to give a presentation on the licence terms at the annual meeting. Before doing so, he watched some other presentations. The members’ representatives were sat in a long horseshoe shape, with the presenter at the open end of the horseshoe. The previous speaker was a confident public speaker with a strong, US sales-based style. The member representatives seemed to be from a similar background and were not shy of making comments and asking questions. It was a noisy spectator sport.

IP Draughts’ style was rather different, and his experience of public speaking to this type of audience was very limited. His presentation seemed to start okay, but encountered difficulties when people starting making comments. The audience didn’t like it when he explained that sub-licensing should not be permitted, as it might jeopardise the validity of the trade marks. IP Draughts’ firm had obtained legal advice on the worldwide licensing programme from several jurisdictions, including civil law jurisdictions. Severe doubts had been raised by some of the overseas law firms as to whether sublicensing was compatible with a trade mark owner’s legal obligation to control the use of the mark.

Whatever the rights and wrongs of those legal opinions, member organisations wanted freedom to sublicense both group companies and external organisations. If IP Draughts had been 30 years older, he would have had the experience to manage this situation. As it was, he explained that he understood the desire, but this was a legal rather than a commercial issue. If the members wanted to ensure that the trade marks could be enforced against infringers, it was important to get the licence terms right. The audience didn’t like his responses, and turned against him.

IP Draughts had been due to speak again at a later session. But the client’s representatives decided to substitute one of their number in place of IP Draughts.

IP Draughts continued to be involved, behind the scenes. At the end of the week, he flew on to San Francisco. He was due to participate in a second round of negotiations, in a San Francisco hotel, the following week. He thought he had a couple of days off at a hotel on the coast, south of SF. But he was called in to help prepare for the next round of negotiations.

Round two was a more conventional negotiation process, with members sat around a conventional conference table to “page turn” the draft agreement. IP Draughts had more experience of this type of process, and led the discussions. But every few hours he had to take a call from the IBM lawyer at a payphone in the corridor outside the conference room, explain the latest stage of negotiations, and take back to the room the IBM lawyer’s comments on the clauses under discussion. There was no conference phone in the room, and this was before the days of widespread mobile phone use.

After 10 days outside the UK, the negotiations ended and IP Draughts was allowed home. Joy of joys, his flight ticket was upgraded to business class. The IBM lawyer sent a very nice letter to IP Draughts’ boss about IP Draughts’ conduct of the negotiations.

The client didn’t really understand or care that much about legal issues. Some of them understood sales, and some understood technical issues. IP Draughts achieved what was required – an agreed text – but it was a stressful and exhausting experience for him. He is still mentally processing it, 30 years later.

By contrast, appearing as a witness before committees of the House of Commons and the House of Lords, in 2016, were energising experiences. IP Draughts had 27 years’ more experience, and the audiences were more respectful and easier to manage.