Pay attention, class! IP Draughts has been looking at the most popular search terms that have led readers to this blog. Over the last year, 121 people have found the blog by searching for “warranties in a license agreement”.
Of course, this blog has discussed IP warranties many times since it started in 2011. Here are a few instances:
In IP Draughts’ experience, there is no standard set of warranties in a licence (or license) agreement. Partly, this is because there are many types of licences, eg life science or IT, early stage or late stage, B2B or B2C, licensing to an investor-driven vehicle or a company specialising in the area of business that is the subject of the licence, and so on. Each type tends to have different warranties.
In the absence of express warranties in a written licence agreement, the law of the contract may impose implied warranties. This will vary significantly between jurisdictions – to generalise, civil law jurisdictions tend to imply more obligations than common law ones. And the law in each jurisdiction may be a bit vague on what warranties should be implied – there isn’t always sufficient case law to know for certain what terms should be implied. This causes drafters to focus on stating explicitly what is not warranted. For example, IP Draughts’ template licence agreement includes the following text:
- the IP Company does not make any representation nor give any warranty or undertaking:
- as to the efficacy or usefulness of the Patents or Know-how; or
- as to the scope of any of the Patents or that any of the Patents is or will be valid or subsisting or (in the case of an application) will proceed to grant; or
- that the use of any of the Patents or Know-how, the manufacture, sale, or use of the Licensed Products or the exercise of any of the rights granted under this Agreement will not infringe any other Intellectual Property or other rights of any other person; or
- that the Know-how or any other information communicated by the IP Company to the Licensee under or in connection with this Agreement will produce Licensed Products of satisfactory or merchantable quality or fit for the purpose for which the Licensee intended or that any product will not have any latent or other defects, whether or not discoverable; or
- as imposing any obligation on the IP Company to bring or prosecute actions or proceedings against Third Parties for infringement or to defend any action or proceedings for revocation of any of the Patents; or
- as imposing any liability on the IP Company in the event that any Third Party supplies Licensed Products to customers located in the Territory.