Legal Question in Intellectual Property in California
Agent's Fee Termination On Renewed License
Parties entered into a written
agreement (agent and client) that
agent to receive 1% fee of licensed
property that agent brought to the
client. License term was for 3 years
and upon the end, client renewed
directly with the licensor and
unilaterally terminated the 1%
agent's fee asserting that the
''license term had expired.'' Nothing
in the agreement provided for
continuation of fees, however, the
agreement stated that any changes
to the agreement which provided the
1% license fee to the agent would
require to be in writing and signed
both parties. Further, there was
continued business use of the license
from the end of the license period (3
years) to when it was renewed by
the client. Does the agent have a
legal claim on the 1% fee on the
second license term? Did the client
have the right to unilaterally
terminate the 1% agent's fee when
the license was renewed using the
similar licensed properties?
2 Answers from Attorneys
Re: Agent's Fee Termination On Renewed License
This looks like a garden-variety interpretation of contract case, where the ordinary rules would apply. Obviously, a lawyer would need to read and consider the actual language of the contract in addition to surrounding circumstances at the time the contract was entered into, and perhaps trade practice and custom in the business, trade or industry involved. Contracts will be interpreted according to what the court thinks the parties had in mind at the time they were signed, and to the extent there is doubt about what they had in mind, a "reasonable man" approach is used - what would a well-educated and clear-thinking bystander to the negotiations and agreement have thought the parties meant by the language?
As Mr. Stone points out, truly ambiguous language is interpreted against the party who provided that language by writing it in the first place. However, this is only one of many contract-interpretation rules and may not be controlling here.
I'm inclined to think it is a bit unreasonable to conclude that the agent's right to a commission was to run indefinitely, through successive renewals of the license, especially if the agent wasn't to play a role in securing the renewals. However, that's an uninformed and preliminary opinion, which could easily change upon reading the actual contract, which I'd be happy to do without charge if you contact me directly.
Re: Agent's Fee Termination On Renewed License
The answer may depend on who drafted this ambiguous agreement - if you had it drafted, go back to the attorney who you hired to draft it and demand to know why this (predictable) situation wasn't covered
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