PREC. V.

Determina

tion by licensee if patent

void or insufficient supply.

Revocation of

licence if

payments in

arrear or on

bankruptcy &c.

Remaining clauses.

13. If the said letters patent shall from any cause become wholly or as to some material part of the said invention void &c. [Power to determine if patent void or insufficient supply "in any calendar month aforesaid of the full minimum quantity of articles as aforesaid," using Clause 21 of last Precedent]. 14. If for the space of days from the time of delivery (as herein before defined) of any articles supplied to the licensee or his nominees hereunder there shall not be sent or given to the licensor or other person or persons entitled thereto a draft or bill in payment of the prices therefor respectively as aforesaid or if any such draft or bill shall be dishonoured or if the licensee shall make default &c. become bankrupt &c. then the licensor at any time thereafter &c. [Use Licence III., ante].

[For the remaining clauses as to the undertaking to produce the letters patent, &c., Arbitration Clause, and Transmission Clause, refer to last Precedent.]

is not inserted, as being too restrictive of the right of the licensee under Clause 3 to nominate persons to take goods direct from the licensor, &c., and would hamper him in the sales. A covenant by licensor not to sell or grant other licences appears in Clause 3. A covenant as to improvements, &c., seems unnecessary. See ante, p. 221, as to licences merely to sell the patent articles.

(i) The licence should be registered. See note (1) to Licence I., ante. For a clause as to service of notices, use Sp. Cl. 51, ante, p. 242.

VI.

LICENCE to a Firm to MANUFACTURE AT OWN WORKS and (subject to RESERVATION to grant LIMITED Number of SELLING licences) to SELL the patent articles WITHIN A DISTRICT-RENTS and ROYALTIES ON SALES, or at OPTION of Licensees both on Manufactures and Sales-DELIVERY of articles to SUB-LICENSEES to be deemed SALES.

PREC. VI.

THIS INDENTURE made &c. BETWEEN A. B. of &c. (hereinafter called "the licensor") of the one part and C. D. and E. F. carrying on the business of &c. at &c. as co-partners under the firm of &c. (hereinafter called "the licensees") of the other part: Recitals. WHEREAS by letters patent &c. [Grant]: AND WHEREAS the Grant. licensor hath agreed to grant the licensees a licence to use the said Agreement invention at their own works at R. aforesaid and to sell the for licence. 's manufactured by them thereby within the counties of &c. subject to the reservations and upon the terms hereinafter appearing: NOW THIS INDENTURE WITNESSETH that in consideration of the royalties and rent hereinafter reserved and the covenants and agreements on the part of the licensees hereinafter contained the licensor doth hereby grant unto the licensees and their assigns the full sole and exclusive liberty right licence power and authority to make use and exercise the said invention. and manufacture -'s according thereto at their works at R. aforesaid but not elsewhere and also to sell the factured within the counties of &c. (hereinafter called "the said district") EXCEPTING AND RESERVING unto the licensor and his assigns the right within the said district (but not to the exclusion of the licensees or their assigns) to grant licences (a) to any persons firms or companies respectively to sell the said

so manu

's but so that not more than six in number of such licences shall be subsisting at the same time: To HAVE HOLD exercise and enjoy the said licence and premises unto and by the licensees and their assigns for and during all the residue &c. [As in last Precedent] but so long only as the licensees or either of them or their or his assigns shall either alone or in co-partnership with any other person or persons continue and carry on the business of &c. at the said works at R. under the firm of &c.: AND THE

(a) See Clause 18.

PREC. VI.

The term
"licensees"
to include

assigns as
aforesaid.
Royalties
half-yearly
on articles
sold.

Average clause.

Licensees may vary above royalties by paying both

as to manufacture and sale.

Proviso that articles unsold at end of licence be treated as

sold and bear royalties accordingly less discount. Delivery of articles to

LICENSOR doth hereby covenant &c. [Qualified covenants as to validity of patent and right to grant as in Licence II., ante]: AND THIS İNDENTURE ALSO WITNESSETH that in consideration of the premises it is agreed and declared as follows:

1. The said term "the licensees" shall also be applicable herein as far as can be to the survivor of the said C. D. and E. F. or other the persons or person for the time being constituting the said firm carrying on the said business at R. (b).

2. The licensees shall during the continuance of this licence subject to the provisions of the next two clauses respectively pay to the licensor half-yearly on every

day of and day of - for every manufactured by them hereunder and in the half-years then ending respectively sold by them the royalties mentioned in the first part of the schedule hereto according to the size and description of the - -'s so sold (c) and also such further sum (if any) as together with the said royalties shall amount to the sum of £A (hereinafter called "the rent").

3. PROVIDED ALWAYS that if the rent for any half-year shall exceed the royalties &c. [As in Clause 2 of Licence IV., ante].

4 (d). The licensees may at the end of each half-year without giving any previous notice to the licensor of their intention so to do (but so as not thereby to reduce the rent) vary the amount of royalties in respect of any of the articles aforesaid not being less than in number then in their possession and unsold by debiting themselves therefor in the accounts for such half-year with the royalties in this behalf mentioned in the second part of the schedule hereto and so that at the end of any succeeding halfyear in which the same articles shall be sold they shall debit themselves therefor in the accounts with the further royalties in this behalf also mentioned in the second part of the said schedule: PROVIDED ALWAYS (e) that at the end or sooner termination of this licence all articles in the possession of the licensees not then already sold whether actually manufactured or only in course of manufacture shall bear the royalties which would respectively become payable by virtue of this clause or Clause 2 as if the same had been actually sold less however a discount of thereof.

per cent.

5. All articles delivered or sent by the licensees to any of their sub-licensees according to the terms of their respective sub-licences to be deemed shall for the purposes of this licence be considered as having been

sub-licensees

a sale.

actually sold by the licensees at the respective times when the same shall have left their said works in the possession of or to be delivered to such sub-licensees respectively. And the licensees shall accordingly pay in respect of such articles the royalties pro

(b) As to covenants binding assigns, see ante, pp. 185, 186.

(c) As to royalties on sales, see ante, pp. 203, 228.

(d) As to this clause, see ante, p. 204.

See p. 203, ante, as to this proviso.

vided by Clause 2 or (as the case may require) Clause 4 to be paid PREC. VI. in respect of sales less a discount of per cent. thereof (ƒ). 6. The licensees shall keep at their works at R. aforesaid all proper books of account &c. [Use Licence I., with the addition from Licence II., as to verification of statements].

*

Accounts
ion allowed
kept, inspec-

&c.

[For other clauses not inserted or provided for hereinafter, see Clauses Licences I-IV., ante; and also refer to "List of Ordinary Core- 7—17. nants," ante, p. 224, B. II. (g).]

*

non-user in

reserved

18. The licensor shall not within the said district during the Covenant by continuance of this licence use the said invention or any invention licensor as to for the time being subject hereto or grant licences in respect district except thereof except that he may grant licences to sell but not to manu- as to grant of facture the said articles to such an extent only that there shall not licences under be more than six in number of such licences subsisting at the power. same time and that the respective licensees thereunder shall be bona fide purchasers from or through the licensor of the articles supplied to them respectively and not his mere agents for the sale thereof respectively whether on commission or otherwise.

[For a mutual covenant as to improvements, &c. use Licence II.; Remaining power of revocation (h), use Licence III.; power of determination by clauses. licensees, use Licence IV. (except as to default in supplying material); acknowledgment, &c. as to the letters patent, use Licence III.; arbitration clause, use Form 24, ante, p. 55; and transmission clause, use Form 25, ante, p. 56.]

(f) As to this clause, see ante, p. 216.

(g) These may be taken to be eleven in number, namely, covenants by the licensees to use the patent mark; to manufacture only according to the specification; to allow inspection of factory; not to assign, &c. (with provisoes granting power to sub-license, and requiring notice of sub-licences as in Licence III.); not to dispute validity of patent; and to detect infringements and give notice thereof; and covenants by the licensor to pay fees and perform conditions of patent; to defend patent; to take proceedings for infringements or permit licensees, &c.; not to amend specification; and that there are no other subsisting licences within the district. See the qualification as to "assistance" in Licence III.

(h) In the clause conferring this power on the licensor, use, with reference to the bankruptcy of the licensees, the expression "the licensees or any member or members of the said firm for the time being.”

(i) The licence should be registered. See note (1) to Licence 1., ante, p. 246. For a clause as to services of notices, use Sp. Cl. 51, ante, p. 242.

PREC. VII.

Recitals. Grant of patent to A. B. Articles of partnership between the licensors

VII.

LICENCE (exclusive) for a DISTRICT at a sum the balance whereof is payable in five years by half-yearly INSTALMENTS-If any instalment in arrear, final balance, or any part demanded, at once payable-PAYMENTS TO CEASE if Patent void, but to revive if decision overruled-CESSER OF PAYMENT to be taken as DAMAGES -ASSIGNMENT for the District, when all Monies paid-REVOCATION of the Licence if long Default in Payment or Bankruptcy —Licensee may determine on breach by Licensor (a).

[SALE on HIRE SYSTEM.]

THIS INDENTURE made &c. BETWEEN A. B. of &c. and C. D. of &c. (hereinafter called "the licensors ") of the one part and E. F. of &c. (hereinafter called "the licensee ") of the other part : WHEREAS by letters patent &c. [Grant of patent to A. B.]: AND WHEREAS by articles of partnership dated &c. and made between the said A. B. of the one part and the said C. D. of the other part it was declared (amongst other things) that the said parties thereto should become partners for the term of years from the date thereof in the business of &c. including the manufacture and sale of - which might be manufactured according to the said invention: And that the said letters patent and any extension thereof together with the benefit of any improvements made or acquired during the partnership by either party and the letters patent (if any) in respect thereof should be assets of the partnership: And that no licence under the said letters patent or any of them should be granted by the said A. B. without the concurrence Agreement to of the said C. D. (b): AND WHEREAS the licensors have agreed with the licensee to grant to him an exclusive licence within the district comprising the city of in the county of

making the patent an asset of the firm.

grant the

licence.

to

(a) As to this kind of licence, see ante, pp. 37-39, 208, 209. Compare this precedent with Agreements XI. and XII., unte, pp. 89, 93, where the sale of the patent is to be for the whole kingdom.

(b) In Kenny's Patent Buttonholeing Company v. Somerville and Lutwyche, 37 L. T. 878), Bacon, V.-C., decided that a patent registered in name of one partner only, but which had become partnership assets, could be worked by the other partner after the dissolution and notwithstanding the assignment thereof by the patentee to a purchaser with notice.