Software License Agreement Territory


It is particularly important to include this in a patent license, because even if only one or two patents are granted and the patents are subsequently challenged and found to be void, the licensee must continue to pay royalties, since trade secrets are part of the license agreement and are part of the justification of the royalty base. With regard to online sales, we only use the combination of limiting the delivery address to the relevant territory and limiting the use of credit cards issued outside the relevant area. This seems to work well to protect the delimitation of license rights. Active sales can be processed, as the agreement may have a provision stating that licensees must respect territorial rights. But for passive sales, it`s easy for a licensee to call a customer in another region and say, «I won`t market the products in your territory, but please ask me a question via email and ask me the price and I`ll sell you.» It`s a bit difficult because you have a lot of licenses for areas in the European market. We recently had an example where the right to exploit the IP rights of a famous brand on the Benelux market in the Benelux market and in Poland was sold to two different licensees, with another licensee in Poland. The licensor has introduced a minimum guarantee to compare royalties for the two territories with each licensee. In the late 1990s, Peter Seltzer announced the word «Kashwére» as the brand for Caterpillar products. In 2009, Seltzer sold his company`s assets, including the Kashwére brand, to TMG Kreations due to a substantial change in financial situation. As part of the transaction, TMG granted Seltzer an exclusive license to sell Chenille products in Japan under the name Kashwére. Subsequently, the relationship between the parties shifted to a dispute involving a number of claims and counter-claims. One of Seltzer`s claims is that TMG knew that some of its distributors were selling in Japan and supporting those distributors in such sales. The District Court dismissed the entire dispute concerning cross-applications for summary judgment and both parties appealed.

The licensee in the Benelux had a customer in Poland who was a wholesaler. The Polish licensee was upset by the attack on his territory by another licensee. This is difficult to avoid, so a distinction must be made between active and passive selling. In some software licensing agreements, licensees negotiate acceptance testing provisions with certain remedies when the software does not meet the defined criteria or does not meet those conditions. Licensors oppose acceptance testing and usually occupy the position that their guarantee of performance or compliance is all they need. Remuneration is the price paid by the licensee for the use of the software. As a rule, the price of the license paid is one-time or annual and such payment is made during the purchase of the software. As a rule, in international software licensing agreements, the price is concluded in the contract; In other words, it is non-negotiable unless the licensor has made adaptations to the specific needs of the user. In the international software distribution agreement, the licensor receives an initial amount for the assignment of the license and royalties for each of the software licenses sold by the distributor in the assigned territory. These two concepts can be negotiated according to the number of potential licensees in the territory exclusively allocated to the distributor.

There was, for example, the well-known judgment of the Court of Justice of the European Communities in the Premier League case, which disqualified the limitation imposed on licensees in certain regions of the EEA on the sale of set-top boxes accessible from any EEA country and considers such a restriction on sales as a restriction enshrined under Article 101 TFEU. . . .

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