Because an IP license agreement is governed by state contract law, it is important to consider the relevant state’s case law when drafting any such agreement. For instance, the California Supreme Court recently determined that jury waiver provisions in a contract are invalid unless the procedures set forth in section 631(d) of the California Code of Civil Procedure are followed. Grafton Partners v. Superior Court of Alameda County (2005) 36 Cal. 4th 944, 956. Section 631(d) enumerates six specific ways parties to a civil suit may waive the right to a jury trial. Prior to Grafton, California courts had enforced jury waiver provisions regardless of their compliance with this code section. Trizec Properties, Inc. v. Superior Court (1991) 229 Cal. App. 3d 1616, 1618.
In light of this new development, a company preferring to avoid a jury trial in the future may wish to add ADR provisions to their IP license agreements rather than simply rely on a jury waiver clause.
Regardless of a company’s view on jury waiver provisions, it is essential to have IP license agreements drafted by a lawyer who is familiar with recent case law developments.
Grafton Partners L.P., et al. v. Super. Ct., 36 Cal. 4th 944 (2005).
Trizec Properties, Inc. v. Super. Ct. 229 Cal. App. 3d 1616 (1991).
Cal. Civ. Pro. Code § 631 (West 2003).