Non-Assertion

Non-Assertion

In the context of intellectual property rights, a party to a contract that owns any patents applicable to the contract may agree to a non-assertion covenant (aka covenant not to sue) as an alternative to granting a non-exclusive license to the other party. Some of the advantages of a non-assertion covenant from the patent holder’s perspective is that the patent holder usually does not have to make any warranties regarding its ability to license (e.g., concerning ownership, authority, etc.):

Exemplar C53-1

During and after the Term, you will not assert, nor will you authorize, assist, or encourage any third party to assert, against us or any of our affiliates, customers, vendors, business partners, or licensors, any patent infringement or other intellectual property infringement claim regarding any Service Offerings you have used.

Exemplar C53-2

Customer grants to Vendor under the Customer Patents immunity from suit for infringement based in whole or in part on the use, making, having made, offering for sale, selling, importing, modifying, reproducing, distributing, displaying, performing, providing or otherwise transferring Vendor Products.

Another advantage of a non-assertion clause to the patent holder is that, unlike a license, a non-assertion clause constitutes a promise not to sue that is personal between the promisor and promisee, and therefore is not sublicensable to a third party, i.e., is not applicable to downstream partners, customers, or users:

Exemplar C53-3

Contractor irrevocably promises not to assert any Contractor Necessary Claims against you for making, using, selling, offering for sale, importing or distributing any Covered Implementation, subject to the following. This is a personal promise directly from Contractor to you, and you acknowledge as a condition of benefiting from it that no Contractor rights are received from any third parties (including but not limited suppliers, distributors, or otherwise) in connection with this promise. If you file, maintain or voluntarily participate in a patent infringement lawsuit against a Contractor implementation of such Covered Specification, then this personal promise does not apply with respect to any Covered Implementation of the same Covered Specification made or used by you. To clarify, “Contractor Necessary Claims” are those claims of Contractor-owned or Contractor-controlled patents that are necessary to implement only the required portions of the Covered Specification that are described in detail and not merely referenced in such Specification. “Covered Specifications” are listed below. This promise is not an assurance either (i) that any of Contractor’s issued patent claims covers a Covered Implementation or are enforceable or (ii) that a Covered Implementation would not infringe patents or other intellectual property rights of any third party. No other rights except those expressly stated in this promise shall be deemed granted, waived or received by implication, exhaustion, estoppel, or otherwise.

In the following exemplar, the parties clarify that the seller’s covenant applies to all of the customer’s immediate beneficiaries:

Exemplar C53-4

Seller, including any of its successors, predecessors, affiliates, subsidiaries, assigns, officers, directors and agents, hereby unconditionally and irrevocably promises and covenants that it will never assert any patents against Customer or any of Customer’s customers, successors, predecessors, affiliates, subsidiaries, assigns, officers, and directors. This covenant not to sue shall forever serve as a bar to any attempt by Seller (or anyone else) to assert the Seller patents against Customer or any of its customers.

Because a patent owner’s personal promise not to sue a customer may not bind a successor to the owner, the parties may require the patent owner to impose and/or enforce the non-assertion obligation on any successors in interest:

Exemplar C53-5

Contractor, their affiliates, agents, licensees and successors of interest, agree to not assert any patent or patent application against Company, it affiliates, agents, licensees, or successors that would prevent Company, its affiliates, licensees, agents, licensees, or successors or customers of each, from practicing, for any purpose(s), under the claims in the Company patents specified above. Upon change of control of Contractor or assignment by Contractor to any party or entity, Contractor shall concomitantly impose the obligation to implement the foregoing non-assertion obligation to Company with respect to such acquirer or affiliate.

Exemplar C53-6

Seller will not, and will use its best efforts to cause its Affiliates to not, assert any claims or rights, by commencing, or causing to be commenced, any action or proceeding that alleges infringement by Customer under any Seller patents based in whole or in part on the use, making, having made, offering for sale, selling, importing, reproducing, modifying, distributing, displaying, performing, providing or otherwise transferring Seller Products. This covenant will be binding on all successors in interest to, all transferees or assignees of and any exclusive licensee of Seller’s patents, or any rights granted in any Seller patents. Seller agrees to inform all successors in interest, transferees, assignees or licensees of such Seller patents and to obtain their written consent to be bound by such covenant. Any affiliate of Customer that has agreed with Seller to the same or a similar covenant with regarding to the Seller Products will be regarded as an intended third-party beneficiary of this covenant with the right to enforce this covenant.