Comments on: More Fun with Language of Discretion—”Party X Hereby Grants Party Y the Right to [Verb]“ http://www.adamsdrafting.com/2007/09/30/party-x-hereby-grants-to-party-y/ Tue, 31 Jan 2012 01:23:03 +0000 hourly 1 http://wordpress.org/?v=abc By: Ken Adams http://www.adamsdrafting.com/2007/09/30/party-x-hereby-grants-to-party-y/comment-page-1/#comment-9490 Ken Adams Tue, 02 Oct 2007 14:06:40 +0000 http://www.adamsdrafting.com/2007/09/30/party-x-hereby-grants-to-party-y/#comment-9490 Michael: I'm drawing a distinction between "Acme hereby grants Widgetco a license" and "Acme hereby grants Widgetco a right to [verb]." I think that the former addresses your concerns, and I'm happy to leave it alone. The latter is the one that I'm interested in. Ken Michael: I’m drawing a distinction between “Acme hereby grants Widgetco a license” and “Acme hereby grants Widgetco a right to [verb].” I think that the former addresses your concerns, and I’m happy to leave it alone. The latter is the one that I’m interested in. Ken

]]> By: Michael Fleming http://www.adamsdrafting.com/2007/09/30/party-x-hereby-grants-to-party-y/comment-page-1/#comment-9427 Michael Fleming Mon, 01 Oct 2007 14:23:34 +0000 http://www.adamsdrafting.com/2007/09/30/party-x-hereby-grants-to-party-y/#comment-9427 In intellectual property licensing, we think of the license itself as a separate object from the contract that grants it. This is important in IP, where whether a right derives from a license in IP versus a contractual condition can make all the difference in the world. (It boils down to whether acts by the licensee that might be outside the scope of the license grant will be a breach of contract, with contract remedies, or an infringement of the out-of-scope IP, with the usually much more nasty IP infringement remedies.) A less monumental problem is that we often want to have the license grant itself have a term that is different than the contract that granted it, and thus having it carved out as its own blob of existence right from the get-go leads to some less ponderous drafting in the survival clause. (Arguably, one need not even have the survival clause deal with the license if one has granted the license correctly, since once it's granted it lives under its own terms separate from the existence of the contract.) Thus, the language of 'hereby grants' is used by IP license drafters, since it's a relatively proven way of ensuring the judge will read that as a grant of license rather than a contractual condition. I'm not suggesting that we couldn't work on some less ponderous form, since there's nothing in the statutes that actually requires the 'hereby grants' language. Especially in IP, I think the 'hereby grants' structure typically leads to terribly drafted run-on sentences, and thus it's ripe for reconsideration. Nonetheless, I would suggest caution in stepping away from 'hereby grants' where it might actually make a substantive difference in IP licenses. In intellectual property licensing, we think of the license itself as a separate object from the contract that grants it. This is important in IP, where whether a right derives from a license in IP versus a contractual condition can make all the difference in the world. (It boils down to whether acts by the licensee that might be outside the scope of the license grant will be a breach of contract, with contract remedies, or an infringement of the out-of-scope IP, with the usually much more nasty IP infringement remedies.) A less monumental problem is that we often want to have the license grant itself have a term that is different than the contract that granted it, and thus having it carved out as its own blob of existence right from the get-go leads to some less ponderous drafting in the survival clause. (Arguably, one need not even have the survival clause deal with the license if one has granted the license correctly, since once it’s granted it lives under its own terms separate from the existence of the contract.)

Thus, the language of ‘hereby grants’ is used by IP license drafters, since it’s a relatively proven way of ensuring the judge will read that as a grant of license rather than a contractual condition.

I’m not suggesting that we couldn’t work on some less ponderous form, since there’s nothing in the statutes that actually requires the ‘hereby grants’ language. Especially in IP, I think the ‘hereby grants’ structure typically leads to terribly drafted run-on sentences, and thus it’s ripe for reconsideration. Nonetheless, I would suggest caution in stepping away from ‘hereby grants’ where it might actually make a substantive difference in IP licenses.

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