CLP Licensing Law & Regulations 2 — Questions and Answers
Question 1: Under U.S. patent law, what is the standard 'field of use' restriction in a patent license?
- A clause limiting the licensee to exploit the patent only within a defined industry or application area (Correct answer)
- A geographic restriction limiting use to certain U.S. states
- A time limit on how long the licensee may practice the patent
- A royalty rate tied to production volume within specific manufacturing fields
Correct answer: A clause limiting the licensee to exploit the patent only within a defined industry or application area
Field-of-use restrictions confine a licensee's right to exploit a patent to a specified category of products or markets, and are generally enforceable under U.S. patent law.
Question 2: Which federal statute governs the licensing of trademarks in the United States at the federal level?
- The Sherman Antitrust Act
- The Lanham Act (15 U.S.C. § 1051 et seq.) (Correct answer)
- The Copyright Act of 1976
- The Trade Secrets Act of 1996
Correct answer: The Lanham Act (15 U.S.C. § 1051 et seq.)
The Lanham Act is the primary federal statute governing trademarks, including trademark licensing requirements such as quality control obligations.
Question 3: A licensor fails to maintain adequate quality control over a trademark licensee's goods. What is the likely legal consequence?
- The licensor receives reduced royalties
- The license is automatically converted to an assignment
- The trademark may be deemed 'naked' and abandoned (Correct answer)
- The licensee gains co-ownership of the trademark
Correct answer: The trademark may be deemed 'naked' and abandoned
Without adequate quality control, a trademark license is considered 'naked,' which can result in the mark being deemed abandoned and unenforceable.
Question 4: What does the doctrine of 'exhaustion' (first sale doctrine) mean in the context of patent licensing?
- A patent holder may only sue for infringement once per accused product
- Once a patented product is sold by or with the patent owner's authorization, patent rights in that item are exhausted (Correct answer)
- Patent rights expire after the first licensed use in commerce
- A licensee exhausts its rights upon the first sublicense granted
Correct answer: Once a patented product is sold by or with the patent owner's authorization, patent rights in that item are exhausted
Patent exhaustion means that an authorized sale of a patented product terminates the patent owner's ability to control that specific item downstream.
Question 5: Under the Defend Trade Secrets Act (DTSA) of 2016, what is required for information to qualify as a trade secret?
- It must be registered with the USPTO before licensing
- It must derive independent economic value from not being generally known and be subject to reasonable secrecy measures (Correct answer)
- It must be disclosed in a confidential patent application within one year
- It must be licensed exclusively to a single party
Correct answer: It must derive independent economic value from not being generally known and be subject to reasonable secrecy measures
The DTSA defines a trade secret as information that derives economic value from secrecy and is subject to reasonable measures to maintain that secrecy.
Question 6: In a copyright license, what distinguishes an 'exclusive' license from a 'non-exclusive' license legally?
- An exclusive license must be recorded at the Copyright Office; a non-exclusive license need not be
- An exclusive license transfers ownership; a non-exclusive license grants only a right to use
- An exclusive license must be in writing to be enforceable; a non-exclusive license may be oral (Correct answer)
- An exclusive license cannot be sublicensed; a non-exclusive license always can be sublicensed
Correct answer: An exclusive license must be in writing to be enforceable; a non-exclusive license may be oral
Under 17 U.S.C. § 204, an exclusive copyright license must be in a signed writing to be valid, whereas a non-exclusive license may be granted orally or by conduct.
Question 7: What is a 'grant-back' clause in a patent license agreement, and what is its primary antitrust concern?
- A clause requiring the licensor to return advance royalties if certain milestones are not met
- A provision requiring the licensee to license back improvements to the licensor, potentially limiting the licensee's incentive to innovate (Correct answer)
- A clause granting the licensor the right to reclaim the licensed technology upon breach
- A provision that grants the licensee back-pay for prior unauthorized use
Correct answer: A provision requiring the licensee to license back improvements to the licensor, potentially limiting the licensee's incentive to innovate
Grant-back clauses require licensees to grant rights in improvements to the licensor, and they can raise antitrust concerns if they dampen the licensee's incentive to innovate.
CLP Licensing Law & Regulations 2
Under U.S. patent law, what is the standard 'field of use' restriction in a patent license?