Last week I noticed this item on the website of the Licensing Executives Society (U.S.A. and Canada). Entitled Clarifying Provisions Avoid Ambiguity in Patent License Agreement, it discusses contract provisions at issue in the opinion of the Delaware U.S. District Court in TQ Delta, LLC v. Adtran, Inc. (PDF here). (The court subsequently reconsidered its opinion, but not in a way that has a bearing on what’s discussed in the LES piece.)
I’ll spare you the details. All that matters for our purposes is two sentences in the contract in question. The first said that the license excludes certain patents; the court calls it “the Carve-Out.” The parties disagreed whether the first sentence covers licenses for both listed xDSL and unlisted xDSL, and the court held that it’s ambiguous.
Here’s the second sentence (italics in the original), which the court called “the Clarity Provision”:
For clarity: the license[ ] includes a license to those patents of Aware for products compliant with other standards provided that those patents are applicable to the aforementioned standards.
The court held that the first sentence and the second sentence, taken together, are susceptible to only one interpretation. On that basis, it granted Adtran’s motion for summary judgment.
But instead of assuming that the court coined the term “the Clarity Provision” simply as a convenient label for the second sentence, the LES piece instead refers to that sentence as “A Clarity provision” (emphasis added), as if “clarity provisions” were a thing. And the LES piece concludes as follows: “This case demonstrates the value of clarifying provisions, which help avoid language that may later be seen to be confusing or ambiguous.”
So according to the LES piece, the second sentence is an example of an approach to drafting that can be used to reduce confusion generally. I beg to differ.
For one thing, the court held that the first sentence is confusing, and it relied on the second sentence to salvage matters. That hardly makes the contract in question seem like textbook drafting.
But the bigger issue is that to the extent whatever follows for clarity and its sibling, for the avoidance of doubt, is meaningful, those phrases are unnecessary.
MSCD has a page and a half on for the avoidance of doubt, and it notes that for clarity raises the same issues. Here’s the relevant bit:
Drafters use this phrase to introduce language that ostensibly clarifies the preceding language, usually by indicating that something either falls within or is excluded from the scope of the preceding language.
But used in that manner, for the avoidance of doubt is merely a filler—what follows has to be able to stand on its own, as in this example:
This arbitration agreement applies to all matters relating to this, the RSU Agreement, and the Executive’s employment with the Company, including disputes about the validity, interpretation, or effect of this agreement, or alleged violations of it, any payments due hereunder or thereunder, and all claims arising out of any alleged discrimination, harassment, or retaliation. For the avoidance of doubt, this [read This] arbitration agreement does not apply to any dispute under the Indemnification Agreement.
That’s one reason why MSCD says categorically, “Don’t use for the avoidance of doubt.” That applies equally to for clarity.
But beyond reminding us of the shortcomings of those usages, the LES piece raises two broader issues.
First, it’s a great example of the urge to derive general drafting principles from the mucky business of courts sorting out confusing contract language. That’s what underlies the notion of “tested” contract language—if a court says that a particular bit of verbiage expresses X, let’s always use that verbiage to express X, even though it was sufficiently confusing that people fought in court over what X means. Thanks, but I prefer to express contract meaning clearly, without using dysfunctional language.
And second, the LES piece is an example of the misinformation on the building blocks of contract language that one encounters in the marketplace of ideas. If you’re primarily interested in staying out of trouble, I suggest you ignore the commentary and stick with A Manual of Style for Contract Drafting. I hope you feel confident enough in MSCD to make that leap of faith. You can leave it to me to police the marketplace of ideas. If you’d like my opinion on a bit of commentary, tell me about it.