OUTLINE OF PROVISIONS TO BE CONSIDERED
IN DRAFTING A SOFTWARE LICENSE AGREEMENT

1. Introductory Clause

1. Effective date
2. Parties (full name, address, place of incorporation)

2. WHEREAS Clauses

1. What Licensor owns and represents
2. What Licensee desires and represents

3. Entire Agreement
4. Definitions

1. Licensed Product or Process
2. Royalty and/or License Price
3. Affiliates
4. Licensor’s and Licensee’s Patent Rights (including cutoff dates and territorial limitations)
5. Licensor’s and Licensee’s Copyrights (including cutoff dates and territorial limitations)
6. Licensor’s and Licensee’s Trademarks (including renewal dates and territorial limitations)
7. Licensor’s and Licensee’s Trade Secrets (including cutoff dates and/or circumstances)
8. Licensor’s Technical Information (including cutoff dates and/or circumstances)
9. Licensee’s Technical Information (including cutoff dates and/or circumstances)
10. Other applicable definitions

5. Technical Information

1. Territory in which the information can be used
2. Obligation to maintain information in confidence
3. Information to be used only under Agreement
4. Publicity
5. Right to use Technical Information of Licensor and right to make such information available to Affiliates and other licensees without accounting to Licensor

6. Intellectual Property Rights

1. Grant to Licensee

1. to make, use and/or sell
2. nonexclusive or exclusive (reserve license for Affiliates)
3. nontransferable or transferable
4. revocable or irrevocable
5. territory
6. right to pass on immunity from suit to purchasers
7. license limited to activities for which royalty has been paid
8. extension to Affiliates
9. license applies to a single unit or several units

2. Grant to Licensor re improvements or modifications

1. irrevocable
2. royalty free
3. right to extends to Affiliates
4. right to extend to other licensees

7. Services
8. Delivery and Installation

1. Provision of binaries
2. Provision of Source Code

9. Acceptance Testing

1. Commencement of Acceptance Tests; Acceptance Date
2. Failure of Acceptance Test; Retesting
3. Customer’s Rights Upon Termination After Failure of First or Second Acceptance Test
10. Copies of Software
11. Payments

1. Down payment (fully or partly creditable)
2. Running royalty (fixed amount or percentage); sliding scale
3. Paidup royalty
4. Ceiling for unlimited fully paidup license
5. In U.S. Dollars
6. Royalties specified are to be received without deduction for foreign taxes (where this is illegal, consider whether royalties can be grossed up so licensor nets the royalty specified in license)
7. Minimum royalty
8. Royalty-free sales to Affiliates
9. Split Royalty for Patent/Copyright/Trade Secret
10. Taxes

12. Reports

1. Quarterly, semi-annually or annually
2. Report whether or not there is any licensed activity
3. Payment with report
4. Access to Licensee’s records (may specify independent auditor)

13. Special Provisions

1. Arbitration
2. Defense and hold harmless
3. Most-favored licensee (specify territory)
4. Unlicensed competition
5. Patent marking
6. Copyright marking
7. Settlement for past infringement
8. Deduct royalties paid to third party for license under dominating patent
9. Conversion of exclusive to nonexclusive license unless Licensee pays ____________ Dollars in any four calendar quarters
10. Product or process guarantee
11. Use of confidential information belonging to the other party in U.S. patent applications
12. Exportation of Technical Information
13. Consulting or other technical services

14. Termination

1. By Licensor if Licensee defaults
2. By Licensor if Licensee becomes insolvent
3. By Licensor if Licensee does not pay ____________ royalties in any four calendar quarters
4. By Licensee after ______ years on ______ days’ notice

1. Suspension
2. Termination
5. Maintenance Termaination
6. Rights and Obligations of the Parties upon Termination
7. Refund of Payments after Acceptance
8. Continuing Obligations after Termination

15. Governing Law

1. Law of which state

16. Force Majeure
17. Warranties

1. Licensor’s Fulfillment of Warranty Obligations
2. Indemnification
3. Consequential Damages

18. Notice and Addresses of Parties

1. Addresses to which notices and payments are to be made

19. Right to Assign

1. To Affiliates
2. To successors of entire business

20. Severability
21. Waiver
22. Term

1. For __ years
2. Renewal

1. Upon __ days/months notice
2. Automatic

3. For life of:

1. Copyrights
2. Patents

23. Signatures

1. Delivery
2. Description of Software
3. Description of Services
4. Acceptance Tests
5. Price of the Software
6. Price of the Services
7. Multi-Site Use of Software

1. Acceptance Certificate