Creative Negotiations Secure Client Rights

Our client wanted to license patented technology from a very large public company but didn’t want to be burdened by royalty obligations unless the licensor would enforce its patents against competitors. The licensor initially refused any enforcement obligations claiming it wanted to license the technology to others on standard terms, but with some careful negotiating we convinced the licensor’s attorneys to accept a side letter agreement with enforcement obligations. It soon became apparent the licensor was not going to pursue enforcement efforts against competitors so our client stopped paying royalties. The licensor responded with a series of letters demanding royalty payments and threatening litigation, but their failure to comply with the side letter meant they had breached a specifically-negotiated obligation which dramatically undermined their claims. They eventually gave up and our client ended up with a royalty-free license to important technology.