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Christopher R. Neufeld

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LICENSING & DISTRIBUTION

PURPOSE

Licensing and distribution allow for a technology owner to grant the right or license to others to use their technology, thereby creating a mutually beneficial business relationship.  This grant of the technology license does not constitute an outright assignment of the technology, but is only a limited lease of the technology that is strictly controlled by contract.  Ultimate ownership of the intellectual property rights remains with the technology owner, with all rights reverting back to the owner at the end of the contract.

CERTAIN RISKS *

Reverse Engineering.

     Disassembling, decompiling and decrypting technology with the express purpose of stealing oneĺs trade secrets is a serious crime.  As such, it is important that clear controls are set out at the outset to restrain such activities and provide you with the means to detect and repel efforts to steal your intellectual property.

Third Party Rights.

     Technology is rarely an individual creation.  Innovations and concepts that form part of the licensed technology may be rightfully owned by a third party.  How that ownership interest is dealt with from both a legal and financial perspective can be extremely tedious and costly.  Well drafted licensing and distribution agreements can deal with each partiesĺ responsibility in dealing with these highly volatile legal situations.

Improper Distribution.

     The success of any licensing or distributorship arrangement lies in maintaining central control over the process.  If there is an inconsistent distribution strategy, the full value of the technology that is being marketed will not be realized.  Only by enforcing controls is it possible to optimize profits and facilitate the long-term success of the technology venture.

     The sales process needs to insure uniformity in pricing and a high standard of customer approval (and where dictated, customer support).  This cannot be left at the discretion of your distributors or licensing partners, but requires a degree of oversight that is contractually enforceable.

SALES AGREEMENTS

PURPOSE

Sales agreements facilitate how your product is purchased by both resellers and consumers.  What is being sold has considerable impact on the form of agreement, whether its an outright sale or restrictions are imposed; whether maintenance and/or service options are made available; what controls are imposed upon its use and alteration; etc.  Sales agreements therefore need to be heavily tailored to optimize the profit potential from the sale.

CERTAIN RISKS *

Generic Forms.

     Far too many companies rely upon generic sales forms that are subject to unanticipated legal liability and undercut their profit margins.  If you want to move ahead of your competition, you cannot rely upon "one size fits all" agreements and instead you need to step out of shadows that has trapped so many technology wanna-bees.

Pricing Structure.

     Technology need not be a flat price structure when there are numerous variables in play.  Instead many products (especially those that integrate service, maintenance and other updates and options), should be designed to obtain those additional payments that your users/buyers will grudgingly (but acceptingly) pay, yet you may have otherwise freely given away (people appreciate paying for quality, so let them pay).

As such, when looking for solid legal advice with respect to technology licensing, and its highly specific and complex legal nature, contact computer licensing lawyer Christopher Neufeld of Neufeld Legal P.C. at chris@computerlawyer.ca or 403-400-4092 for businesses situated in Calgary and Alberta or 416-887-9702 / 905-616-8864 for those businesses situated in the Toronto Business Triangle (Toronto-Hamilton-London, Ontario).

* The preceding list(s) of risks is not meant to be exhaustive, to the contrary, it is meant to illustrate a few of the many dangers that can arise when a business fails to retain the legal services of an appropriate lawyer.

 

Christopher R. Neufeld is an attorney admitted to practice in both the State of New York (U.S.A.) and the Province of Ontario (Canada), representing computer / information technology businesses in the United States and Canada.  Court admissions include: Law Society of Upper Canada (Ontario), U.S. Court of International Trade, U.S. Tax Court, U.S. Court of Claims, U.S. Court of Appeals: Federal Circuit, U.S. District Court: Southern & Eastern Districts of New York and New York State Court.  The law firm is located in the western Greater Toronto Area (GTA), with law offices in Burlington and downtown Toronto, and in immediate proximity to Mississauga, Oakville, Hamilton, Brampton, Milton, Guelph and Kitchener Waterloo.  COPYRIGHT 2008/10.

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