1. 21 S T C E N T U R Y L I C E N S I N G S T R A T E G I E S
Digital Convergence, International Issues & Hollywood
or
How to Straighten Out a License in These Digital Days
CALIFORNIA BAR ASSOCIATION
Annual Meeting 2008
James C. Roberts III, Esq.
GLOBAL CAPITAL LAW GROUP PC
GLOBAL CAPITAL LAW GROUP PC

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BACKGROUND INFORMATION
GLOBAL CAPITAL LAW GROUP. Global Capital advises clients on new initiatives,
mergers & acquisitions and new international markets. Clients range from Fortune 100
corporations such as News Corporation and its subsidiaries, MySpace.com and Fox
Interactive Media, to start-ups in digital media, Internet, software, medical and
biotechnology, nanotechnology and environmental technology industries. The firm has
offices in California and Colorado and just opened its first European office in Milan,
Italy. The law firm and the affiliated strategic consulting firm, the Global Capital
Strategic Group comprise The Global Capital Group.
JAMES C. ROBERTS III. Mr. Roberts is the managing partner of Global Capital Law
Group PC and CEO of the Global Capital Strategic Group. Previously, Mr. Roberts was
managing partner of Praxis LLP, a transactional law firm, and CEO of its strategic
consulting subsidiary. Prior to Praxis, Mr. Roberts was CEO of The Atlantic Advisory
Group, a strategic consulting firm advising media and digital clients.
Mr. Roberts started his legal career with Brobeck, Phleger & Harrison and later with
White & Case, advising venture capital and other capital sources and technology
companies. Prior to his legal career, he was at SRI International (formerly Stanford
Research Institute), conducting strategic analysis on and in Southeast Asia, the Middle
East and Europe.
Mr. Roberts is a member of the International Bar Association, the California Bar
Association, and the “virtual” bar association of SecondLife. He founded the first office
in the virtual world, SecondLife, for a California law firm. Mr. Roberts serves on the
board of several, including the Mayme A. Clayton Library & Museum. He is also a
frequent speaker, most recently on “three-screen convergence” and strategies and legal
issues in mobile IP transactions. He can be reached at jcrext@globalcaplaw.com.
JD, University of Chicago; MA, Stanford University; BS, University of California,
Berkeley

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1. INTRODUCTION.
The hour will be spent reviewing a term sheet (briefly) and then the terms of a license
agreement to discuss how the agreements can be drafted. First, some preliminaries.
1.1 Assumptions:
(a) Audience: “Advanced” does not mean only experienced lawyers—anyone at any
level of expertise is invited. “Advanced” means that we will not be spending time
on the basics.
(b) Law School Distinctions: You remember law school: Differences between
copyrights, trademarks & patents.
(c) Not all Licenses: Our framework is technology and digital content licenses—not
music, not biotech, etc.
(d) License Only: We assume it is a license and not work-for-hire.
(e) Staying Out of the Weeds: We will not get into the exceptions to the rule or the
rare risks.
(f) Limits of Your Presenter: He doesn’t have all the answers—or even all the
questions.
1.2 The Context:
(a) True convergence?
• Tivo and Amazon announced a partnership to enable viewers to purchase
items they see in television programming.
• Television station WRAL begins a testbed to broadcast digital video long-
form programming to mobile devices.
(b) Crumbling Walls of the Walled Gardens?
• Facebook and Amazon (among others) opened up their code (e.g., API) to
enable anyone to develop applications for them.
(c) Declining (or Non-existent) Revenues?
• Very few companies are making money from the advertising model on the
Internet (never mind mobile) and CPMs (and other payment metrics) are
dropping fast.
(d) Limits of our Market & our Mindset?
• While News Corp. bought MySpace for $600+ million several years ago,
one year ago this month Nokia purchased Navteq for $8.1 billion dollars.
In other words, we are still a PC-centric market while ROW is mobile-
centric.

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(e) The Clash of Industries:
• Hollywood v. the digital “tradition”: Hollywood wants to own
everything—even if it has not been invented. Silicon Valley wants
discrete rights.
1.3 The Issues. How do you draft your licenses to address these issues?
(a) How do you deal with convergence? Platforms, Technology, Users,
Sublicenses. Dangers of exclusive deals (e.g., technology that cannot
handle changing content, platforms or technology). Know what it
means—e.g., mobile.
(b) Changing revenue model requires flexibility. Negotiating tactics will
come into play. New revenue streams (data and datastreams).
(c) International means more than territory. Territory is still problematic but
what about EU privacy laws? Claims of non-American legal jurisdiction
(country of access v. country of origin)?
(d) Just how important is Hollywood to your model? If content, perhaps
important; if technology, probably not? Non-American media companies
as an alternative?
2. THE TERM SHEET
How will the term sheet be used? Guide negotiations and guide drafting.
Effect: Make sure you are clear that it binding
or non-binding.
Scope: Comprehensive, unless negotiations
strategy compels you otherwise.
Author(s): Business people (client); if binding,
then make sure you clear it.

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3. THE LICENSE
The list below is not comprehensive but those sections that will be most affected by
convergence, international and “Hollywood” issues.
Topic Sample Issues
The Licensor: Multiple sources of technology?
The Licensee: Scope of sublicenses (e.g., subsidiaries,
viewers/users); assignment limitations.
Definitions: Get them right, especially technology (e.g.,
Developed Technology, Underlying
Technology), Platforms, Data, Datastreams,
User Metrics
Scope of license Various platforms, re-purposing (affected by
definitions).
Scope: Purpose The “magic” language + Platforms + audiences
Scope: Territory With global access, just what is the territory?
New forms.
Scope: Sublicense (See above)
Scope: a la Hollywood Will the “future technologies” provision
survive? Challenges possible in foreign
jurisdictions (see “choice of law” below).
Revenue model Just what are they? How real are they now?
Clear math (in exhibits); anticipating other
sources
Need for audit right
Metrics
Connection to dispute resolution
Hollywood’s revenue hunger?
Reps & warranties: Underlying Technology ownership/control
“Open Source” trip-ups (quasi-public domain)
International laws (privacy; “public morality”)
Choice of Law &
Dispute Resolution
Specifications: SLS

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4. SAMPLE PROVISIONS.
So, what’s wrong with these provisions? This is not a trick question. Assume that these
are provisions for technology that enables users to view content on the Web and to
download content. All capitalized terms are defined terms but not all defined terms have
been included below.
4.1 Recitals
A. Licensee owns or operates various websites and provides content for viewing and
downloading by users through other media including broadcast and mobile
applications.
B. Licensor provides technology that enables users to view and download content.
C. The Parties desire to have Licensee license to Licensor that technology for the use
by Licensee through its websites and other media, including but not limited to e-
mail distribution and mobile devices.
D. The Parties desire that Licensor also provide other services, including the
development of additional technology and the maintenance of certain of the
websites and related technology.
E. The Parties desire to share certain revenues generated by the websites.
4.2 Licensed Technology
“Documentation” means any and all materials and information provided by Licensor to
Licensee in connection with the use of the Program, including without limitation all
documentation and specifications detailed in Attachment XX.
“Underlying Technology” means the Program developed by Licensee prior to the
performance of any technical work by Licensor as set forth on Attachment E.
“Updates” means any and all modifications, enhancements, customization, updates,
replacement and revisions to the Program pursuant to this Agreement or the Maintenance
Agreement, as the case may be, and/or that offered by Licensor to any of its licensees.
New Versions are excluded from Updates.
4.3 Entertainment Industry Provisions.
“Broadcast Television Rights” means all forms of free broadcast television distribution
now known or hereafter devised of the entire Program, including but not limited to
broadcast by VHF and UHF television stations.
“Internet Downloading” means exploitation of a digital Motion Picture Copy by making
it available on the World Wide Web portion of the Internet in a manner that allows its
transmission to a Computer for making another exact digital copy of the Motion Picture

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Copy and retaining the new digital copy for use for more than a transient period of time
after completion of the initial continuous period of transmission. Internet Downloading
does not include any form of Internet Streaming.
“Internet Rights” means Internet Downloading or Internet Streaming exploitation of a
Motion Picture. Internet Rights do not include any form of PayPerView, Video, Pay TV
or Free TV exploitation of a Motion Picture.
“Internet Streaming” means exploitation of a digital Motion Picture Copy by making it
available on the World Wide Web portion of the Internet in a manner that allows
continuous viewing of the Motion Picture Copy on a Computer in a substantially linear
form substantially simultaneously with the transmission of such Motion Picture Copy
over the Internet but which does not allow making another digital copy except for a
transient period of time necessary to facilitate such viewing. Internet Streaming does not
include any form of Internet Downloading.
“Internet Streaming/Downloading” means exploitation of a digital Motion Picture Copy
by making it available on the World Wide Web portion of the Internet for both Internet
Downloading and Internet Streaming at substantially the same time.
4.4 License Grant.
2. License Grant. Licensor hereby grants to Licensee for the Term a worldwide,
nonexclusive license, with a limited right of sublicense, to the object code version of the
Program, Updates and Documentation, solely for the following purposes and on the terms
and conditions set forth in this Agreement:
2.1 Use. Licensee may install, use, reproduce, and publicly display on the
Web the Program and Documentation solely for the purpose of the display
of content on Licensee’s Site.
2.2 Sublicensing. Licensee shall be entitled to sublicense its rights under this
Agreement (other than the right of sublicense) to Affiliates solely for the
purposes set forth above.
Another example:
2. License & Ownership.
2.1 License. Licensor grants to Licensee a limited, non-exclusive, non-
transferable license to use, publicly display and modify, solely in accordance with this
Agreement, the Program solely on the Platforms.
2.2 Ownership. Licensor agrees and acknowledges that, except as otherwise
set forth in this Agreement, information transmitted through the Program is the property
of Licensee and/or User, as applicable, and proprietary to such entity or individual.
4.5 One Example of Hollywood’s Take on Ownership

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[Studio shall have] the exclusive, irrevocable, right, license, privilege, and authority to
exploit the Work in any manner, medium, form or language, now known or hereafter
devised, whether or not reasonably contemplated as of the Effective Date, in its sole
discretion, and to make copies of such exploitations and to exhibit, distribute, exploit,
market, perform and make digital transmissions of the Work throughout the universe in
any and all media by any and all means, whether now known of hereafter devised and
Licensee automatically and irrevocably shall be deemed to have granted, conveyed,
assigned, transferred and set over to Company, all right, title and interest in and to the
Work, including without limitation any and all copyrights therein and thereto (and all
renewals, extensions, restorations and resuscitations thereof) and any and all rights now
known and used, under any and all such copyrights in perpetuity (but in any event for not
less than the period of copyright and any and all renewals, extensions, restorations and
resuscitations thereof), in any and all languages and in any and all media now known and
used, now known and hereafter used, or hereafter known or devised and used for the
entire universe(collectively, the "Rights"). Without limiting the generality of the
foregoing, the "Rights" shall in any and all events include, without limitation, all right,
title and interest in and to the following:(i) the sole and exclusive Motion Picture rights,
including, without limitation, the sole and exclusive right to produce one (1) or more
Motion Pictures or other derivative works (including, without limitation, sequels,
prequels, remakes, musicals and/or serials) based, in whole or in part, on the Work and
the right to fix, reproduce, release, distribute, exhibit, perform, transmit, broadcast,
advertise, promote and otherwise exploit such Motion Pictures or other derivative works
by any and all means and in any and all media whether now known and used now known
and hereafter used, or hereafter known or devised and used, including, without limitation,
all of the following: theatrical; non-theatrical (including airlines, ships and other carriers,
military, educational, industrial and the like); pay-per-view; home video (including
video-cassettes, digital videodiscs, laserdiscs, CD-ROMs, video-on-demand; near video-
on-demand and all other formats); all forms of television (including pay, free, network,
syndication, cable, satellite, high definition and digital): subscription-on-demand; all
forms of digital or on-line exploitation, distribution and/or transmission (including,
without limitation, the internet),CD-ROMs, fiber optic or other exhibition, broadcast
and/or delivery systems and/or computerized or computer-assisted media; all rights of
communication to the public, rights of distribution to the public, rights of making
available or other forms of public or private communication and/or distribution; and all
forms of dissemination, communication or distribution to one or more locations or
parties, whether embodied or transmitted utilizing analog, digital or other formats;(ii) all
ancillary, incidental and subsidiary rights including, without limitation, all
merchandising, (e.g., games, computer, video and other electronic games, toys, comic
books, so-called "making of books," apparel, food, beverages, posters, and other
commodities, services or items), commercial tie-ins, co-promotions, music, music
publishing, soundtrack, photonovel, novelization, screenplay publication, interactive
media, multi-media, and theme park (or other "themed" or location-based attraction)
rights in and to the Work; (iii) the right to make or publish excerpts, synopses or

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summaries of the Work for purposes of advertising, publicizing or exploiting the
foregoing rights in and to the Work; (iii) the exclusive right to publish the Work or
excerpts therefrom and (iv) the exclusive right to use the title or titles by which the Work
may be now or hereafter known, or any components of any such title or titles (a) as the
title of Motion Pictures and/or in connection with the advertising, marketing, publicity,
promotion and other exploitation thereof, whether such Motion Pictures are based wholly
or partially upon the Property or are independent of the Work, (b) in connection with
songs, musical compositions, music or lyrics and/or phonorecords, whether or not
included in any such Motion Pictures, and (c) in connection with the publication,
recordation, performance, and any other use whatsoever of the foregoing items.