Intellectual Property Law

Not All Contracts Are Create Equal

By Michael Scott

For a number of years, I have taught a law school course titled ?Drafting and Negotiating Technology Contracts.? It is one of many skilled-based courses being offered by law schools today to help their students ?hit the ground running? as they enter the practice of law. Over the last decade, law firms have increasing insisted that law students know more than legal theory if they are going to be hired as young associates. Law firms no longer have the luxury of training neophyte lawyers in every aspect of law, but expect law schools to not only teach them ?the law,? but also to teach them how law is practiced today. That is why my course, even though very narrowly focused, is oversubscribed every year.

This year I thought I would add a second skills-based course in drafting license agreements. Fortunately, there are a number of good casebooks that have appeared over the last couple of years that focus on licensing law. I thought that using one of those texts, supplemented by some of the licensing materials from my multimedia law treatise, would provide a good foundation for the course. Like my previous course, I thought I could create a series of exercises that could teach students how to draft contract clauses for various licensing situations. However, unlike my prior course, where everyone seemed to be working in the same direction from Day 1, I have found the licensing law class to be a much greater challenge.

Why? Because many of the students have worked at law firms and in legal departments of various entertainment industry companies, either as summer clerks or as externs, and have been exposed to licensing agreement actually used in their particular industry ? all of which are radically different from license agreements used in other industries. The result is that perhaps a third of the class thinks they know what a license agreement looks like, and are shocked, and often offended, when I tell them that the license clauses they are drafting are not acceptable.

The problem is that every sub-industry within the entertainment field has their own unique way of writing license agreements, and the clauses used have been honed for very specific types of transactions. While the technology industry generally has a style of contract drafting that does not differ significantly with the subject matter ? patent license for semiconductors look a lot like patent license for biotech (with some obvious differences in terminology), license agreements in the music industry may look very different depending on whether you are working for a composer, music publisher, record company, recording artist, etc. And that?s just the music industry. The same Tower of Babel exists in the movie industry, television industry, sports industry, etc.

What I have found is that I must ask the students to look beyond the very specific clauses unique to a particular player in a particular entertainment field, and try to see those aspects of licensing that are common to all (or at least most) of the IP fields. That?s turned out to be easier said than done. I need to constantly talk about the important underpinnings of licensing law in general, and how those general principles are then ?customized? for each industry. I have to tell the students to see beyond the industry they have some (generally fairly superficial) familiarity with, and understand what sets licenses apart from other forms of agreements.

We are just entering Week 4 of the class, and I think I have around 80% of the students on board to that broader way of thinking about licensing. Unfortunately, that still leaves about 20% of the students thinking that the way they learned to write licenses in their first and only ?job? in the field is the only way to write such contracts. The positive results of this ongoing debate is that it gives me a lot of examples to use in class to highlight the fact that licenses are very malleable things that can be modified to meet the needs of a particular industry or sub-industry, but that underlying those differences are certain principles that are (almost) universal in application.

Fortunately, in a couple of weeks the materials we have been covering that focus on the general principles of licensing, will give way to more industry-specific contracts. That will give the students an opportunity to draft clauses that are more particular to specific areas of entertainment law ? music, motion pictures, professional sports, etc. I am hoping that this will solve some of the problems I have faced thus far. I?ll let you know.

Full post as published by Singularity on September 20, 2010 (boomark / email).