“Inure”

Do I really have to say it? OK, here goes: inure (meaning “to take effect; to come into use”) is lame.

You might know inure from “successors and assigns” provisions:

This agreement is binding upon, and inures the benefit of, the parties and their respective permitted successors and assigns.

But since we’ve happily consigned the “successors and assigns” provision to oblivion (see this article), that provision doesn’t give us the opportunity to consider what to do with inure in other contexts.

So consider the following:

The Sponsor’s use of the Licensed Marks under this agreement will inure to [read be for] the benefit of Acme.

This Guaranty shall inure to the benefit of [read benefits] the Lender.

After any retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Article 9 and of Section 10.5 shall continue to inure to its benefit [read it will be deemed to still be an Administrative Agent for purposes of the protections afforded the Administrative Agent under this article 9 and section 10.5].

I rest my case. [Updated July 31, 2014: The first of the three example raises an interesting issue; see the comments.]

Posted in Selected Usages | 6 Comments

  • Pamela Chestek

    “Inure” has special significance for trademarks. Section 5 of the Lanham Act (15 USC s. 1055) says “Where a registered mark or a mark sought to be registered is or may be used legitimately by related companies [i.e., licensees], such use shall inure to the benefit of the registrant or applicant for registration, and such use shall not affect the validity of such mark or of its registration …” “Inure” therefore is the best word to use in a trademark license, so there’s no ambiguity about what the intention is.

    • http://www.adamsdrafting.com/ Ken Adams

      Thanks for that reminder. But it raises a broader question: does one have to parrot suboptimal statutory language? That’s something discussed in this post about “books and records”: http://www.adamsdrafting.com/books-and-records/.

      In this case, doing without “inure” doesn’t change the meaning. But more to the point, the contract provision seems to be merely repeating what the law provides, and as such seems redundant. Why include it? If it’s just to remind the parties of what the law provides, I’d instead have the parties acknowledge the effect of 1055.

      • Pamela Chestek

        If I want to make it clear in a contract that I’m trying to comply with a statutory provision, I will use the suboptimal statutory language rather than try to improve it, which will create ambiguity about what I was trying to accomplish.

        But I agree with you completely about having this language at all, although I am a single voice in the wilderness on this issue. The statute says “if x is happening then y is the effect,” so really the only question is “is x happening?” The contract should be saying (and generally does say, through quality control provisions) “this is how we’re doing x,” which should be all that you need in the contract (acknowledging that you should actually be performing x too).

        The risk is that, if x isn’t happening, and therefore y isn’t true, then there’s no use or improper use of the trademark and it will be abandoned. The non-use or misuse (“naked license”) defense is available to anyone, but since you have a contract with your licensee you can at least estop the licensee from claiming it by saying in the contract “you’re not allowed to claim in the future that y isn’t happening no matter whether I’m performing x or not.” There is such an estoppel theory at law, “licensee estoppel,” but it’s not universally recognized. Smart lawyers therefore put a specific estoppel provision in their trademark licenses, but where contracts don’t have a licensee estoppel provision the stock language you quoted sometimes fills this gap. It is generously read by the courts as a licensee estoppel, which isn’t at all what it says but it is equitable to read it that way, and so it’s at least not wrong to infer it from the language. So if THAT’s what it comes down to (stopping you before you say “but if the contract was written right in the first place it wouldn’t come down to this!” and agreeing with you completely), then you should be parroting suboptimal statutory language because the court will be able to find law to support its interpretation that the language creates an estoppel.

        If you wrote an article saying why trademark licenses don’t need to say anything at all about what the legal effect of the licensee’s use is, I would tweet it for days!

        • http://www.adamsdrafting.com/ Ken Adams

          I might just write something about this! I’ll let you know if I do.

          • Pamela Chestek

            That would be awesome! Just email me (I’m easy to find) and I can give you all the history and statutes. I’m in the throes of an article on why “naked licensing” is a failure as a legal theory, so I’m very up to speed on all of this.

  • http://www.adamsdrafting.com/ Ken Adams

    Yes, it’s a language-of-policy trifecta.