contract negotiation preparation (Redlining) _ Business Law for Technical Professionals

I’m working on a contract negotiation project, and need help to do that. First, there are two hypothetical companies involved (RNA and VB). I will represent one of them which is VB. I received secret facts about VB that contains general information followed by confidential information about the company. NOT SHARE “secret facts” with the negotiation counterpart (other student). Secret facts are business confidential information and you are entrusted with doing your best to maintain confidentiality and to negotiate a deal on behalf of the hypothetical company that you represent. The deliverables that needed from you is:1- Redline various sections of your draft Software License Agreement to better protect the corporation you represent in this license deal. This is a draft and used to guide you in the negotiation. The sections you redline will likely be the topics you will negotiate with your partner. 2- Answer the questions in the Pre-Negotiation Preparation Exercise to help you prepare for your negotiation.**** I attached the draft Software License Agreement file, the Pre-Negotiation Preparation Exercise document, and the VB company secret facts.

Business Law for Technical Professionals
SOFTWARE LICENSE AGREEMENT
This SOFTWARE LICENSE AGREEMENT (this “Agreement”) is entered into as of ____________, 2022 (the
“Effective Date”) by and between RNA Vaccines, LLC (“RNA”), a hypothetical Massachusetts
corporation (“Licensor” or “RNA”) and VirusesBegone, LLC (“VB”), a hypothetical Maryland
corporation (“Licensee” or “VB”) for the purpose of granting Licensee a limited license to access and
use the data packages that RNA generates for Covid variant(s).
DEFINITIONS. As used in this Agreement:
1.
2.
•
“Data Package” means the research, documentation and data, either separately or together,
furnished by RNA to Licensee which details the specifications and functionalities of the
vaccine(s) which it created for Covid variant(s). All Data Packages involve one (1) or more
Covid variant(s), which is/are specifically identified in the Data Package documentation.
•
“End User Customer” means anyone that purchases pharmaceuticals developed as a result of
Licensee’s use of Licensor’s Data Package(s) to treat persons diagnosed with a Covid variant.
•
“Intellectual Property Rights” means all present and future worldwide copyrights, trademarks,
trade secrets, patents, patent applications, moral rights, contract rights, and other proprietary
rights.
•
“Licensee Product(s)” means any antiviral pharmaceutical drug created by VB to treat persons
diagnosed with or potentially suffering from any Covid variant(s) that is the subject of one or
more Data Package(s).
•
“Territory” means European Union.
LICENSEE APPOINTMENT AND LICENSES
License. Subject to the terms and conditions of this Agreement, RNA hereby grants to
Licensee, an exclusive license (as detailed in Section 3) to access and use the vaccine Data Package(s)
for the Covid variant(s) being targeted in the development of a Licensee Product to market and sell to
End User Customers in the Territory.
2.1
License Restrictions. Licensee acknowledges that the Data Package(s) are the exclusive
property of the Licensor and constitute valuable trade secrets. Accordingly, Licensee agrees not to (a)
modify, adapt, alter, translate, or create derivative works from any Data Package(s); (b) distribute,
sublicense, lease, rent, loan, or otherwise transfer any Data Package(s) to any third party, except as
permitted herein; (c) reverse engineer, decompile, disassemble, or otherwise attempt to replicate the
Data Package(s); (d) use the Data Package(s) or any component thereof, for any purpose other than the
development of Licensee Products under this Agreement; or (e) sell any Licensee Products outside the
Territory or use Data Package(s) to develop pharmaceutical drugs for marketing or sale outside of the
Territory.
2.2
Ownership of the Data Package. The Data Package and all worldwide Intellectual Property
Rights therein, are the exclusive property of RNA. All rights in and to the Data Package not expressly
granted to Licensee in this Agreement are expressly reserved by RNA.
2.3
3.
EXCLUSIVITY. The rights to access and utilize the research, data and documentation comprising
each Data Package granted in this Agreement to the Licensee are exclusive for the duration of this
Agreement.
4.
FEES AND PAYMENT
License Fees. For each Data Package license, Licensee shall pay RNA a two-million
($2,000,000) dollar license fee.
4.1
Taxes. Licensee will be responsible for all taxes, fees, duties, and other governmental
charges, and any related penalties and interest, arising from the payment of fees to Licensor under this
Agreement or the delivery of Data Package(s) or license(s).
4.2
4.3 Records. At all times during the term of this Agreement, and for at least three (3) years after
the termination of this Agreement, Licensee will maintain at its principal place of business complete
and accurate records with respect to Licensee’s activities pursuant to this Agreement.
5.
CONFIDENTIALITY
Confidential Information. For purposes of this Agreement, “Confidential Information”
means any data or information regarding the business, finances, services or technology of RNA
provided to Licensee or otherwise obtained by Licensee, including, without limitation, research,
technical, marketing, financial, pricing, employee, and planning information, and any other data or
information received or otherwise obtained under this Agreement that (a) is designated as confidential
by RNA at the time of disclosure; or (b) should reasonably be considered, given the nature of the
information or the circumstances surrounding its disclosure, to be confidential. Confidential
Information also includes the terms and conditions of this Agreement and the existence of the
discussions between the parties. This provision will survive the expiration or termination of this
Agreement.
5.1
Licensee’s Obligations. Licensee shall: (a) hold Confidential Information in strict confidence
and take reasonable precautions to protect such Confidential Information (including, without
limitation, all precautions Licensee employs with respect to its own confidential materials); (b) not
divulge any Confidential Information to any third party (other than to employees or contractors as set
forth below); (c) not use RNA’s Confidential Information, or permit it to be accessed or used, for any
purpose other than to fulfill the parties obligations under this Agreement; and (d) not copy or reverse
engineer any materials disclosed under this Agreement or remove any proprietary markings from any
Confidential Information.
5.2
5.2.1 Limited Access. Any employee or contractor given access to any Confidential
Information must have a legitimate “need to know” and Licensee shall be responsible for each
such person’s compliance with the terms of this Agreement.
5.2.2 Government Regulators.
If Licensee is required to provide any Confidential
Information belonging to Licensor to government authorities in order to obtain authorization to
market or sell Licensee Products in the Territory, Licensee shall: (a) prior to providing any
Confidential Information to any government authority, provide written notice to Licensor of the
requirement so that Licensor may take any action it deems necessary to protect its Confidential
Information from public disclosure, and (b) fully apprise the government authorities that the
submission contains Confidential Information protected from disclosure which belongs to
Licensor.
Exceptions. This Agreement imposes no obligations with respect to information which: (a)
was in Licensee’s possession before receipt from RNA; (b) is or becomes a matter of public knowledge
through no fault, directly or indirectly, of Licensee; (c) was rightfully disclosed to Licensee by a third
party without restriction on disclosure; (d) was or is independently developed by Licensee, as
established by documentary evidence, without reference to or use of the Confidential Information; or
(e) is required to be disclosed by Licensee pursuant to a subpoena or similar court order, provided that:
(i) Licensee gives reasonable notice to RNA and allows RNA to participate in the proceeding; and (ii)
Licensee uses diligent efforts to limit disclosure and to obtain confidential treatment or a protective
order.
5.3
6.
WARRANTIES
Warranties by Both Parties. Each party warrants that it has full power and authority to enter
into and perform its obligations under this Agreement, and the person signing this Agreement on such
party’s behalf has been duly authorized and empowered to enter into this Agreement.
6.1
6.2
RNA’s Warranties
RNA Warranties. RNA represents and warrants that the Data Package does not
knowingly infringe upon the Intellectual Property Rights of any third party.
(a)
Disclaimer of Warranty. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 6, THE DATA
PACKAGE IS PROVIDED “AS IS”, AND THE WARRANTIES PROVIDED IN THIS SECTION 6 ARE IN LIEU OF
ALL OTHER WARRANTIES OR CONDITIONS, WHETHER EXPRESS, IMPLIED, OR STATUTORY, REGARDING
THE SOFTWARE AND DATA PACKAGE, INCLUDING ANY WARRANTIES OR CONDITIONS OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR TITLE.
(b)
6.3 Warranties Made by Licensee. Licensee represents and warrants that it will not attempt to
market or sell antiviral pharmaceutical drugs created using information from the RNA Data Package(s)
except as specifically permitted under this Agreement.
7.
INDEMNIFICATION
Indemnification by RNA. RNA will defend, indemnify and hold harmless, at its own expense,
any lawsuit against Licensee brought by a third party to the extent that the lawsuit is based upon a
claim that the Data Package infringes any Intellectual Property Rights of such third party.
7.1
LIMITATION OF LIABILITY. IN NO EVENT WILL RNA BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT,
EXEMPLARY, SPECIAL OR INCIDENTAL DAMAGES, INCLUDING ANY LOST PROFITS, ARISING FROM OR
RELATING TO THIS AGREEMENT. RNA’S TOTAL CUMULATIVE LIABILITY IN CONNECTION WITH THIS
AGREEMENT AND THE DATA PACKAGE, WHETHER IN CONTRACT, TORT OR OTHERWISE, WILL NOT
EXCEED $1,000,000.
8.
9.
TERM AND TERMINATION
9.1 Term. Unless earlier terminated pursuant to Section 9.2, the initial term of this Agreement
will begin on the Effective Date and will conclude after a period of ten (10) years or the licensing of five
(5) Data Packages, whichever occurs first.
Termination. Either part may terminate this Agreement, effective immediately upon written
notice, if the other party breaches any provision of this Agreement and does not cure the breach
within thirty (30) days after receiving written notice thereof from the non-breaching party.
9.2
Effects of Termination. Any provision of this Agreement that is described as surviving
termination shall remain in full force and effect and will survive the expiration or termination of this
Agreement.
9.3
10.
GENERAL
Export and Import Laws. RNA and Licensee will comply with all applicable export and import
control laws and regulations.
10.1
Assignments. Licensee may not assign or transfer, by operation of law or otherwise, any of
its rights under this Agreement or delegate any of its duties under this Agreement to any third party
without RNA’s prior written consent. Any attempted assignment or transfer in violation of the
foregoing will be void.
10.2
Notices. All notices, consents and approvals under this Agreement must be delivered in
writing by courier, by electronic facsimile (fax), or by certified or registered mail, (postage prepaid and
return receipt requested) to the other party at the address set forth beneath such party’s signature
below, and will be effective upon receipt or three (3) business days after being deposited in the mail as
required above, whichever occurs sooner. Either party may change its address by giving written notice
of the new address to the other party.
10.3
Governing Law and Venue. This Agreement will be governed by the laws of the State of
Massachusetts without regard for its conflicts of law principles that would require application of the
laws of a different state. Any action or proceeding arising from or relating to this Agreement must be
brought in a federal or state court located in Boston, Massachusetts and each party irrevocably
submits to the jurisdiction and venue of any such court in any such action or proceeding.
10.4
10.5 Waivers. All waivers must be in writing. The failure to enforce any provision of this
Agreement on one or more occasions will not be deemed a waiver of the right to subsequently enforce
said provision. Any actual waiver(s) of a provision shall not serve as a waiver of any other provision.
Severability. If any provision of this Agreement is unenforceable, such provision will be
changed and interpreted to accomplish the objectives of such provision to the greatest extent possible
under applicable law, and all remaining provisions will continue in full force and effect.
10.6
10.7 Counterparts. This Agreement may be executed in counterparts, each of which will be
considered an original, but all of which together will constitute the same instrument.
10.8 Force Majeure. Any delay in the performance of any duties or obligations of either party
(except the payment of money owed) will not be considered a breach of this Agreement if such delay is
caused by a labor dispute, shortage of materials, fire, earthquake, flood, or any other event beyond the
control of such party, provided that such party uses reasonable efforts, under the circumstances, to
perform and provides written notice to the other party of the specific circumstances causing the delay
and its plan to resume performance as soon as possible within ten (48) hours after learning of the need
to exercise this force majeure provision.
10.9 Independent Contractors. Licensee’s relationship to RNA is that of an independent
contractor, and neither party is an agent or partner of the other. Licensee will not have, and will not
represent to any third party that it has, any authority to act on behalf of RNA.
10.10 Entire Agreement.
This Agreement constitutes the entire agreement between the parties
regarding the subject hereof and supersedes all prior or contemporaneous agreements,
understandings, and communication, whether written or oral. This Agreement may be amended only
by a written document signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
RNA:
VB:
By:
By:
Name:
Name:
Title:
Title:
Address for Notice:
Address for Notice:
Boston, Massachusetts
Gaithersburg, Maryland
Attn:
Attn:
Pre-Negotiation Preparation Exercise
Business Law for Technical Professionals
NAME: ________________________
DATE: _________________________
ASSIGNED ROLE: ________________
1. What are your company’s main goals/interests with respect to this contract?
2. What do you believe the other company’s main goals/interests are with respect to this
contract?
3. Which sections in the contract are you proposing changes to?
4. For each section needing a change, briefly note the changes you are proposing and write
out the arguments/explanation you plan to make to the other company’s negotiator to
persuade him/her to accept the change.
5. For each argument/explanation listed above:
a) How you believe the other negotiator will respond?
b) What is your planned reaction to the response?
c) Are there any possible solutions or compromises?
6. To which sections of the contract do you predict the other company’s negotiator will
propose changes?
7. What will your response be to the other negotiator’s predicted changes?
8. Are there any “deal-breakers” for your company in this contract? (A “deal breaker” an
issue that, if unresolved during negotiations, would cause your company to not move
forward with the deal).
NOTE: Negotiations and outcomes may turn out differently than listed or anticipated in a PreNegotiation Preparation Exercise.
1
GENERAL FACTS
RNA Vaccines, LLC (“RNA”), a hypothetical Boston, Massachusetts technology
corporation created and patented a template to create mRNA vaccines for coronaviruses (e.g.,
SARS & Covid 19) and variants as they emerge. RNA packages the data it generates in report
packages and through licenses grants access to and use of the corresponding data (“Data
Packages”). 1 The vaccines which RNA has developed have high distribution and delivery costs
because they must be stored at low temperatures; each Data Package identifies those constraints.
VirusesBegone, LLC (“VB”), a hypothetical Gaithersburg, Maryland corporation, develops
pharmaceutical drugs to treat persons diagnosed with coronaviruses (i.e “treatments”) and seeks to
license the Data Packages from RNA to use in developing its treatments. The terms of the
arrangement need to be memorialized in a License Agreement.
VB Secret FACTS & LICENSING INTERESTS (not to be shared)
VB has successfully created drugs to treat COVID-19 discovered in China in 2019 and
its early variants. VB’s researchers found the data made public by RNA and its competitors on
the development of vaccines created for the first variant very helpful in creating its
pharmaceutical treatments for COVID and assure VB management that, in theory, the RNA
Data Packages would provide critical information for rapid development of pharmaceutical
treatments for new variants. However, they insist they need additional Data Packages to prove
that theory accurate.
To obtain approval to market its pharmaceutical treatments, VB must be able to support
a claim that its treatments are 90% effective for patients that contract Covid 19, and at least 85%
effective for SARS and other known coronavirus variants. VB needs assurances from its
researchers that it can support such a claim.
VB prefers to commit to purchasing two (2) vaccination Data Package licenses to
develop pharmaceutical treatments for two (2) Covid variants over the next five years, but it has
the ability to extend this and develop pharmaceutical treatments for three (3) variants using
three (3) Data Package licenses over the next six (6) to seven (7) years.
VB can pay up to $1.9 million per license for the first two (2) Data Packages to develop
treatments for those two (2) Covid variants provided it is for no more than 6 years. However, if
forced to extend its purchase to three (3) licenses, VB cannot pay more than $1.8 million per
license during that 6 to 7 year period. This is based on an assumption that VB would sell from
14 to 26 million doses for treating each variant in North America, where it should receive an
average of $.06 per dose. Sales in other countries and areas are less predictable.
VB would also seek a reduction in each license fee purchased over a subsequent 10 year
period, based on a graduated scale ranging from a 25 to 35% reduction on the 4th license, 35 45 % reduction on the 5th license and 45 – 55 % reduction on each additional license acquired
during that 10 years. VB will award its sales team meaningful bonuses for successfully
negotiating license fees at the lower end of the price range.
The “Data Packages” are the subject of the license. The terms of the license are to be negotiated with VB. VB, if
successful in obtaining the license, will use the information in the Data Packages to produce “treatments” of one kind or
another that can be marketed and sold. Treatments can include, but are not limited to, vaccines.
1
Other considerations:
VB prefers obtaining an exclusive license, world-wide, to market and sell its pharmaceutical
treatments, but would be willing to limit it marketing and sales to developed nations in Europe and
possibly North America.
•
•
•
•
•
VB understands that RNA’s vaccines are less useful and effective in less developed
countries due to the availability of cold storage facilities and distribution networks.
However, those limitations should not impact the pharmaceutical treatments which VB
will develop with the assistance of the data from the RNA Data Packages.
VB has been approached to develop low-cost vaccines for undeveloped countries based
on research it has done in collaboration with research centers in those countries and has
built a business plan around making those developments. The RNA Data Packages will
provide critical information for developing those pharmaceuticals.
VB has a strong preference for any disputes arising from the agreement to be governed
by Maryland’s laws with venue in Maryland.
VB prefers traditional litigation and would like to avoid an arbitration clause, if possible.
China has gotten wind of the discussions between VB and RNA and has approached VB
about examining and improving the vaccines developed in China and also creating an
appropriate, cost-effective pharmaceutical treatments to sell in China as variants emerge.