Electronic Information Management: Negotiating a Supply Licence Agreement - Assignment Example

Topic: Electronic Information Management Assignment I. Introduction As a manager of the information department of Killem Ltd., a large British pharmaceutical company with several sites in the UK and abroad, I am currently negotiating a licence for the supply of a database with Fatprofits Inc., which will give our R & D staff access to the full text electronic versions of a selection of medical and pharmacy research journals. Fatprofits has sent us a draft licence agreement for us to consider before I meet with its sales executives. I have therefore examined the draft to provide an analysis of it to brief my manager for the negotiations that will follow. It is my manager who will be meeting the sales executives, not me, so my manager needs as full a brief as possible. In doing the analysis I have therefore set my objectives in the following discussion II. Objectives: 1. To maximize what are the advantageous and minimize what are the disadvantageous provisions of the Contract between Killem, Ltd (licensee) and Fatprofits (licensor) in favour of Killem. 2. To help the negotiation manager of Killem in closing the contract with the most advantageous position under the circumstances III. Strategies: To attain the above objectives, Killem should 1) reject clauses or provisions that are totally unacceptable based on proposal of Fat profits 2) avoid discussing clauses favourable to Killem with the sales executives, so as to prefer to let sleeping dogs lie Clauses that favour us 3) negotitiate for what is the ideal position while being prepared to a fall-back position if we cannot achieve the ideal 4) suggest provisions that should be there but are not present 5) remove any clauses that duplicate each other 6) reconcile any clauses that contradict each other? 7) recommend appropriate headings for the proposed contract 8) make any reorganisation of the structure of the Agreement needed if there is a need To implement the strategy, I will therefore need to answer or discuss the following questions or items: A. Clauses that are totally unacceptable and should be rejected out of hand B. Clauses that favour you, and that you want to avoid discussing with the sales executives, as you’d prefer to let sleeping dogs lie C. Clauses that you feel need to be negotiated, and what your ideal position is, and what a fall-back position would be if you cannot achieve the ideal D. Are there any clauses that should be present but that are not E. Are there any clauses that duplicate each other? F. Are there any clauses that contradict each other? G. Are all the headings appropriate? H. Is any reorganisation of the structure of the Agreement needed, e.g., clauses should be shifted to other places? IV. Analysis A. Clauses that are totally unacceptable and should be rejected out of hand The following clauses or provisions are unacceptable and should be requested to deleted or modified. a. Clause 6.1.5, which provides: Licensee agree to accept full liability, including consequential losses, for users’ actions, for example, should a user break copyright law Comment: Making Killem, Ltd. to accept full responsibility for user’s action actions should a user break the copyright law would be unfair. Violating the law is a personal decision. Killem’s liability should allow the exemption or limitation if it exercises due diligence through its management in doing its responsibilities under the contract. Hence, it is not fair to make the company accept full responsibility on things beyond its control. This is especially true in the case of walk in users which could be authorized to access the database if said walk in are with Killem’s premises. In addition, the very essence of the its right under the license it to have access to the licensed material, hence, to ever imagine that it could be liable under the contract for copyright law would seem to give Killem unnecessary burden. Moreover, item number 12 of the principles for licensing electronics resources (Association of Research Libraries, 1997) says: A license agreement should require the licensor to defend, indemnify, and hold the licensee harmless from any action based on a claim that use of the resource in accordance with the license infringes any patent, copyright, trade-mark, or trade secret of any third party. Comment: The above principle appears logical since it is the essence of the license to authorize use in order not to be charged of violations of copyright law. Between the licensor and the licensee, the former would be the most likely violator of the copyright law because it is supposed to have the authority to publish what it is selling as service through licensing. b. Clause 10.1. On this clause Killem is to accept the risk for any damage caused to Killem should it turn out that the Publications contain errors or infringes copyright and Killem’s holds Owner harmless from and against any loss, damage, cost, liability or expense (including reasonable legal and professional fees) arising out of any actual or alleged infringement of copyright or because of errors in the information, even if caused by Owner’s recklessness. Comment: This would make the contract useless because it appears that all risks under the license are shifted to the licensee. It should be the licensor that should hold the licensee harmless from copyright violations as stated in the first part, since this is a license to use copyrighted materials, not the other way around. This amounts to waiver of liability, which violates Section 1714 of the California Civil Code (Official California Legislative Information, n.d.). c. Clause 10.2, which provides: The Owner makes no representation to Killem that the Publications will not contravene any laws, including but not limited to the laws of defamation, pornography and contempt of court (or concepts approximating thereto) anywhere in the world. Comment: This should be rejected because, it would imply that the owner or the publisher will be authorized to violate the laws on defamation and other laws by representing the in the negative. This is therefore being made to avoid the responsibility before the law and which serves no purpose because consequence for violation of the law is not subject to agreement in any case. d. Clause 21. 2, under Clause 11, which reads: All matters contained in this Agreement and any associated information and the parties shall treat documentation as confidential unless such matters are or become within the public domain. This obligation shall survive the termination of this Agreement. Killem may not discuss the terms of this Agreement with any external professional legal advisors. Killem further agrees to treat all information regarding FPI’s business methods strictly confidential at all times. Comment: This is very unfair for the licensee since it is being prohibited to ask for professional help as if the licensor has everything to hide. Moreover, making the obligation to survive after termination of the agreement is really that unfair to the licensee. It will not only be violating the right of the licensee’s contractual rights but also its constitutional rights particularly the right to counsel (Bills of Rights Comparative Law Materials on Detention and Questioning, n.d.). Contractual right is violated because the consent in contract should be free. To prohibit a party to secure professional help is an act defeating that freedom to contract (). The right to counsel is violated because of the prohibition to seek external professional legal advisors. The right to counsel is even afforded to an accused. To deny it a free person would be an act of the highest disrespect for the other party. Constitutional rights are not subject to agreement. e. Clause 14.2, which reads: Killem agrees that FPI need not pay any Court order in any country for either exemplary damages, or damages for consequential loss, awarded against FPI as a consequence of any errors or omissions in the Database, however caused. Comment: This provision amounts to waiver of liability, making the licensor to be not liable in any case. If this is not deleted, there is no sense of having a contract as this one. The essence of a contract is to define the obligations and right of the parties and to know when one party should be made liable. To sustain this provision will be at the height of stupidity. This may also violates section 1668 of the California Civil Code (REOVEN CAPRI v. L.A. FITNESS INTERNATIONAL, LLC, (2006) and the ruling in the case of Health Net of California, Inc. v. Department of Health Services (2003). B. Clauses that favour Killem, and what to avoid discussing with the sales executives, as the negotiator would prefer to let sleeping dogs lie The following clauses need not be discussed: a. Clause 1 on Definitions of terms b. Clause 2 on License Grant c. Clause 3 on Permitted Uses, except for the following with corresponding provisions: 3.1.3.1 access the Licensed Material by Secure Authorization in order to search, retrieve, display and view the licensed material 3.1.3.3 print out single copies of parts of the Licensed Material; 3.1.3.7 provide single printed or electronic copies of single articles at the request of individual Authorised Users; Comment: The exceptions should be part of the items to be negotiated further, the reason being for all the above exceptions, the access to data might be too limited to afford a faster way of documenting access to information in case research is conducted. d. Clause 5 on Responsibilities of the Publisher, except 5.1.3 on limited 5-days- a-week access 5.2 on right to withdraw anytime where there is no more right to publish and non-pro rata refund for the unexpired fee payment Comment: The exceptions should be subject to further negotiation to possibly obtain better concessions from the publisher. e. Clause 7 on Fee except Clause 7.3, which provides: The licence fee is payable on an annual basis. The fee shall be paid by Killem within thirty (300) days of initial signature of the contract, and no later than the anniversary of the initial signature of the contract thereafter. If the initial signature was 29th February of a leap year, payment may be made on 1st March in the non-leap years following. Comment: This needs some clarification since there is a conflict between the words and the figures. There is a need to clarify how much could be charged by the licensor for every billing period. It is being proposed that the maximum billing per month should not be more than one-twelfth (1/12) of the annual fee of $ 50,000. This strategy is also being intended to minimise having to suffer non-refund in case the licence is prematurely terminated since it is licensor’s proposal to deny pro-rata refund or re-imbursement. f. Clause 8 on Terms and Termination, except 18.2, which provides: In addition to any remedy, the Publisher may terminate this Agreement immediately without further obligation in the event of: (i) any breach of this Agreement which cannot be remedied or is not remedied within thirty (30) days of the party in breach being requested to do so; Comment: If any breach could be used as ground for termination by licensor, there is possibility of abuse and the licensee would be in very precarious situation. There must be a minimum amount of breach quantifiable in money. It may be negotiated that to qualify for termination under this provision, the amount of breach should at least be equal to one-twelfth (1/12) or average per month of the annual billing of $ 50,000. 8.3, which provides: Termination of the Agreement for any reason shall oblige Killem to erase the Publications from its premises. Owner has the right to enter Killem’s premises at any time to ensure that this Clause has been complied with. Comment: It may be negotiated the right to enter Killem’s premises be made on reasonable business hours, otherwise, Killem would be at the mercy of the licensor if it wants to enter the premises any time. 8.4, which provides: On termination of this Agreement, the Publisher will not be required to reimburse the Licensee a pro rata proportion of the then remaining Fee for the unexpired part of the Subscription Period. Comment: As commented upon earlier, one remedy is to avoid having an advance payment by being obliged only to pay at least monthly. If it can be negotiated to remove the provision, then it would be better. g. Clause 9 on Acknowledgment and Protection of Intellectual Rights Property Rights h. Clause 10, except Clauses1 0.1 and 10.2, which are simply not acceptable. Please see question Letter A. i. Clause 11 on Force Majeure except 21.2 on prohibition to discuss the terms of this Agreement with any external professional legal advisors and Killem’s agreeing to treat all information regarding FPI’s business methods strictly confidential at all times. Comment: The prohibition to discuss is simply not acceptable and the confidentiality of information must give way to reportorial requirements to government agencies and to licensee’s use of the information when it is sued under the license. j. Clause 13 on Governing Law k. Schedule 1, except Item no.1, which provides: During the time of this Agreement, Killem shall pay to FPI an annual licence fee of $50,000 p.a. FPI reserves the right to alter the licence fee at any time. It shall give written notice to Killem of any such change. The revised fee shall then apply for the subsequent year. A 10% discount on the fee shall apply if the licence fee is paid in dollar bills, sent by registered post to FPI’s address. The licence fee shall be paid within thirty (30) days of FPI rendering its invoice to Killem Comment: As earlier said, it is propose that the manner of payment should at the maximum, be made once a month and the amount should not exceed one-twelfth (1/12) of the annual billing. This strategy is to avoid having to make advance payment that may be subject to forfeiture in favour of the licensor in case of early termination. l. Schedule 2, Item no. 3, which provides: No more than five members of Killem staff may access the database at any one time. “Staff” is defined as an employee of Killem. Comment: The number of members having at any one time should be maximised without additional charge. This would really depend on the availability of resources of the licensor and the information requirement of Killem. C. Clauses that you feel need to be negotiated, and what your ideal position is, and what a fall-back position would be if you cannot achieve the ideal Some negotiable points are already discussed in the preceding questions, hence, answers for this question would be just essentially additions and clarifications. The clauses that need to be negotiated include some of those which were made exceptions above and they are hereby discussed below: a. 3.1.3.1 access the Licensed Material by Secure Authorization in order to search, retrieve, display and view the licensed material b. 3.1.3.3 on printing out single copies of parts of the Licensed Material; c. 3.1.3.7 on providing single printed or electronic copies of single articles at the request of individual Authorised Users; The Principle for Licensing Electronic Resources says: “A license agreement should not require the use of an authentication system that is a barrier to access by authorized users.” (Association of Research Libraries, 1997) Hence, 3.1.3.1 is unfair and should be subject to negotiation otherwise, it must be made unacceptable. If licensor will agree ask for more copies for printing purpose, this will save time in conducting and documenting research. Of course, the fall back position is to accept the single copies of parts since this is being done to protect the rights of authors. Our basis for our comment is Number 10 under The Principles in Electronic Lincensing (Association of Research Libraries, 1997) which says: When permanent use of a resource has been licensed, a license agreement should allow the licensee to copy data for the purposes of preservation and/or the creation of a usable archival copy. If a license agreement does not permit the licensee to make a usable preservation copy, a license agreement should specify who has permanent archival responsibility for the resource and under what conditions the licensee may access or refer users to the archival copy. d. 5.1.3 on limited 5-days- a-week access e. 5.2 on right to withdraw anytime where there is no more right to publish and non- pro rata refund for the unexpired fee payment As previously stated this should be subject to further negotiation to possibly obtain better concessions from the publisher. A six-day or seven-day a week access would allow the company to have more time to finish its researches. If allowed it will save the licensee since the resources are online. The basis for this is most libraries are only seven days a week, 24 hours a day. There is good reason that longer period could be negotiated. f. Clause 7.3, on payment of fee As stated earlier, this needs some clarification since there is a conflict between the words and the figures. There is a need to clarify how much could be charged by the licensor for every billing period. It is being proposed that the maximum billing per month should not be more than one-twelfth (1/12) of the annual fee of $ 50,000. g. Clause 8.2 on the right of publisher to terminate on any Breach This could be subject to abuse by the Publisher. The breach must be substantial enough to justify non-continuance of business. It is suggested the amount of breach meriting termination should at least reach an amount equivalent to allowed monthly billing or about one-twelfth (1/12) of % 50,000. h. Clause 8.3, on right anytime for licensor to enter premises of Killem.. The time access should be limited to reasonable time with in business hours. i. 8.4, on non refund of a pro rata proportion of the then remaining Fee for the unexpired part of the Subscription Period As stated earlier, this could be remedied by allowing a monthly billing and hence avoid any advance payment. j. Clause 14.1 on other matters, which provides: All notices required to be given under this Agreement shall be given in writing in Spanish and sent by post to the relevant addressee at its address, and all such notices shall be deemed to have been received three (3) days after the date of posting . Comment: The English language should also be made use in addition to Spanish. This must be made in the light of the fact that Killem, Ltd. is UK-based. k. Clause 14.3, which provides: In no event may either party bring any action against the other arising out of this Agreement more than one month after the claim for action arises, irrespective of when Killem shall have learned of the alleged defect, injury or loss. Comment: The last part of the sentence should be deleted, otherwise, the provision is unacceptable because it would be unfair to Killem. If Killem is does not know when the injury happened because it was hidden by licensor, Killem’s right is defeated. l. Clause 14.4, which provides: Killem agrees that FPI may at any time inspect its financial records to ensure that the terms of this Agreement are being adhered to. Comment: Right to inpect records of Killem should be limited to those referring to the activities involving the contract otherwise this would violate the right of the licensee to privacy which would amount to meddling. In addition the right to inspect must be limited to within reasonable business hours as commented earlier. m. Schedule 1, Item no.1, which provides: During the time of this Agreement, Killem shall pay to FPI an annual licence fee of $50,000 p.a. FPI reserves the right to alter the licence fee at any time. It shall give written notice to Killem of any such change. The revised fee shall then apply for the subsequent year. A 10% discount on the fee shall apply if the licence fee is paid in dollar bills, sent by registered post to FPI’s address. The licence fee shall be paid within thirty (30) days of FPI rendering its invoice to Killem. Comment: The provisions are vague. It does not limit the number of times within which The Publisher can make a billing may bill in a month. Without a limit, this could be subject to abuse, hence, the amount of billing should be at most twice a month and if it could be negotiated to be done once a month, it would be best. This strategy is also to avoid having not to have availed of refund in case on early termination brought by possible breach of contract. A maximum billing of not more one-twelfth of the $ 50,000 should also be made as part of the contract under this clause. n. Schedule 2, Item no. 3, which provides: No more than five members of Killem staff may access the database at any one time. “Staff” is defined as an employee of Killem. Comment: Killem should ask for maximum possible access depending upon the availability of licensor resources considering that licensor is only proposing also a five day a week access. D. Clauses that should be there but are not there Clauses 10.7 and 10.8 are referred to in clause 5.2 but they are not defined in other parts of the contract particularly under clause 10. It may be inferred however that it is referring to a case where the licensor or publisher loses its right to publish a part of the licensed material and fails to secure provision. Hence we can say that it could be cases where Publisher’s contracts with libraries or other computer net works expired and possibility of renewal could not be obtained or any other reason that would cause the loss of the right. What must be provided in the provision is that Publisher must exercise extra-ordinary diligence in finding for alternative sources for the loss of licensed materials which should be part of the contract. A separate clause for Confidentiality and Privacy should be provided in the contract. There is mention of confidentiality under the Force Majeure Clause but confidentiality has no relation at all. E. Clauses that duplicate each other The following are the clauses that duplicate each other: a. Clauses 10.3 and 1.1 The definition of Authorized users is repeated. It was already part of definition and still part of the clause on representation, warranties and indemnifation. b. Clauses 10.4 and 5.2 The right of the publisher to withdraw parts from the Licensed material in 5.2 has the same meaning of right to change the content and presentation of the Licensed material under 10.4 c. Clauses 14.4 and 8.3 The right of the publisher at any time to inspect financial records of Killem to ensure compliance with the terms of agreement is almost the same as the right to access the premises of Killem’s at any time to erase publications from its premises. In both cases, the access to Killem by licensor is anytime. F. Are there any clauses that contradict each other? Yes, there are clauses that contradict each other, and some of them are as follows: Clause 10.6 provides: Nothing in this Agreement shall make the Licensee liable for breach of the terms of this Agreement by any Authorised User provided that the Licensee did not cause, knowingly assist or condone the continuation of such breach after becoming aware of an actual breach having occurred. Note that many provisions would be contradicted if the above provision and any of the unacceptable provisions below would be made part. What would contradict this provision are mostly the unacceptable provisions, which include the following: Clause 6.1.5 on accepting full liability for user’s actions including breaking a copyright law Clause 10.1 on Killem accepting the risk for any damage, even if cause by owner’s recklessness and Killem holding Owner harmless from any loss or damage arising out of actual or alleged infringement of a copyright. Clause 21.2 under Clause 11, on the obligation of Killem not to discuss the terms of this agreement with any external professional legal advisors Clause 14.2 on Killem’s agreeing that FPI need not pay any Court order in any country for either exemplary damages, or damages for consequential loss, awarded against FPI as a consequence of any errors or omissions in the Database, however caused. Comment: Clause 6.1.5 contradiction is obvious since clause 10.6 limits liability but the 6.1.5 wants full responsibility. Clause 10.6 again limits the liability but 10.1 wants licensee to be only responsible, making it similar with full responsibility in with 6.1.5. Clause 10.6 limits the liability but 21.2 prohibits licensee to know its rights, so how could licensee enjoy its rights in 10.6. Clause 14.2 also amounts to waiver of liability for licensor which contradicts the right conferred to licensee under 10.6. G. Are all the headings appropriate? Not all the headings are appropriate. The clause on representation, warranties and indemnification may be distributed between the responsibilities of each of the parties, particularly clauses 5 and 6. This would simplify the contract. A clause on confidentiality and privacy is being made under the Force Majeure, while finding no relation at all. Hence, a separate clause for confidentiality and privacy must be created. H. Is any reorganisation of the structure of the Agreement needed, e.g., clauses should be shifted to other places? Yes, a reorganization of the structure is needed. The provision on representation, warranties and indemnification and other matters under clause 14 could be distributed under the responsibilities of the parties. Some clause could be combined under miscellaneous provision. Such provisions may include the governing law and other clauses of the draft. Some provisions will have to be deleted, modified o changed to with the intention of making contract fair to both parties and particularly acceptable to Killem which is my employer. Please refer to Appendix A for the Proposed Amendment to the Draft Agreement Conclusions: We have noted the unacceptable clauses or provisions which must be rejected outright. In case these clauses provisions are not deleted or changed, there is no reason to close the deal because any thing that would not be done would be lop-sided agreement in favour of the licensor. The essence of entering into a contract includes mutuality, freedom, and respect for each other. It is never an imposition by one over the other. If deletion or modification is done for objectionable items, then negotiation could be done on many items as enumerated in the analysis. This includes negotiating on the maximum amount of payment per month, the great amount of access given to Killem in terms of greater number of people accessing at any one time, more number of days from the proposed five days a week. Other negotiable items include the making the English language also as acceptable in communicating notices aside from Spanish and the possible refund for unexpired period in case of early termination as well increasing the amount of damage for purposes of breach so as to justify the termination by the licensor if not remedied upon. The contradictory provisions should be reconciled and duplicated provisions should be reduced. Some items must be included and further defined particularly clause 10.7 and clause 10.8. The structure should me modified to give was to the correction of contradictory and duplicated provision, deletion and modification of unacceptable provision as well as amendment and modification of item so which would the result to negotiation . A complete proposed contract is found in the Appendix A. It must be pointed however that our negotiating manager should be guided by our company objective of maximising the advantage and minimising the disadvantage of the propose draft of the license. In addition, the same manager must be guided by the statement of Cohen, S. (2002), in discussing about negotiation that goes this way: A successful negotiation has taken place when the parties end up mutually committed to fulfilling the agreement they have reached. Fairness is a crucial element to make a negotiation process succeed. Some people negotiate as if their most significant objective is to take advantage of other parties; this is self-defeating. If any party feels unfairly treated, he or she may walk away from the negotiation with a negative feeling and a disinclination to live up to the agreement. Recommendations: It is recommended that the unacceptable provisions should delete or modified otherwise, the only remaining option is not to close the contract. If these objectionable items are listened to and accepted by the licensor, the negotiation should be pursued on many items as enumerated earlier which the maximum amount of payment per month, the greater amount of success to the database of the licensor and many other things. In addition, in making the negotiation, the negotiator should be guided the Principles for Lincensing Electronic Resources as suggested by the Association of Research Libraries (1997). See Appendix B. Bibliography: 1) Association of Research Libraries, Washington, DC (1997), Principles for Licensing Electronic Resources, {www document}, URL http://www.arl.org/scomm/licensing/principles.html 2) Cohen, S. (2002), Negotiating Skills for Managers, McGraw-Hill, London, United Kingdom 3) Younkins, E. ( 2000), Freedom to Contract, Liberty Free Press {www document} URL http://www.quebecoislibre.org/younkins25.html 4) Bills of Rights Comparative Law Materials on Detention and Questioning (n.d.), {www document} URL http://www.hrcr.org/safrica/arrested_rights/common_law.html. 5) Official California Legislative Information, n.d., {www document} URL http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=55384414498+4+0+0&WAISaction=retrieve 6) REOVEN CAPRI v. L.A. FITNESS INTERNATIONAL, LLC (2006), B181446, (Los Angeles County Super. Ct. No. LC068545), IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FOUR, {www document} URL http://www.courtinfo.ca.gov/opinions/documents/B181446.PDF 7) Health Net of California, Inc. v. Department of Health Services (2003) 113 Cal.App.4th 224, 234 (Health Net), quoting Gardner v. Downtown Porsche Audi (1986) 180 Cal.App.3d 713, 716.) as cited in the case REOVEN CAPRI v. L.A. FITNESS INTERNATIONAL, LLC, B181446 {www document} URL, http://www.courtinfo.ca.gov/opinions/documents/B181446.PDF Appendix A. Propose Amendment to the draft AGREEMENT THIS AGREEMENT is made day of BETWEEN: Killem Ltd., having its registered office at [insert address] ("Licensee"). AND [Fatprofits Inc. a company having its registered office at 1800 Korman Drive, Los Angeles, California ("Publisher") IT IS AGREED AS FOLLOWS 1. DEFINITIONS 1.1 In this Licence, the following terms shall have the following meanings: "Authorised Users" means individuals who are authorised by the Licensee to access the Licensee’s information services whether on-site or off-site via Secure Authentication and who are affiliated to the Licensee as a member of staff (whether on a permanent or temporary basis) or contractor of the Licensee. Persons who are not a current member of staff or a contractor of the Licensee, but who are permitted to access the Licensee’s information services from computer terminals within the physical premises of the Licensee ["Walk-In Users"] are also deemed to be Authorised Users, only for the time they are within the physical premises of the Licensee. Walk-In Users may not be given means to access the Licensed Material when they are not within the physical premises of the Licensee. "Commercial Use" means use for the purpose of monetary reward (whether by or for the Licensee or an Authorised User) by means of the sale, resale, loan, transfer, hire or other form of exploitation of the Licensed Work. "Fee" means the fee as set out in Schedule 1. "Intellectual Property Rights" means patents, trademarks, trade names, design rights, copyright (including rights in computer software and moral rights), database rights, rights in know-how and other intellectual property rights, in each case whether registered or unregistered and including applications for the grant of any of the foregoing and all rights or forms of protection having equivalent or similar effect to any of the foregoing which may subsist anywhere in the world. "Licensed Material" means the material listed in Schedule 2. "Secure Authentication" means access to the Licensed Material by, Internet Protocol (“IP”) ranges or by another means of authentication agreed between the Publisher and Licensee from time to time. "Secure Network" means a network which is only accessible to Authorised Users by Secure Authentication. "Subscription Period" means the period nominally covered by the volumes and issues of the Licensed Material as identified in Schedule 2, regardless of the actual date of publication. 2. LICENCE GRANT ACKNOWLEDGEMENT AND PROTECTION OF INTELLECTUAL PROPERTY RIGHTS 2.1 The Publisher hereby grants to the Licensee, subject to and in accordance with the terms of this Licence, a non-exclusive licence to access and use the Licensed Material and to allow Authorised Users to access and use the Licensed Material via Secure Authentication for Educational Purposes. 2.2 In consideration for the Publisher’s licensing of the Licensed Material pursuant to Clause 2.1, the Licensee undertakes to pay to the Publisher the Fee in accordance with the provisions of Schedule 1. 2.3 The Licensee acknowledges that all Intellectual Property Rights in the Licensed Material are the property of the Publisher or duly licensed to the Publisher and that this Agreement does not assign or transfer to the Licensee any right, title or interest therein except for the right to access and use the Licensed Material in accordance with the terms and conditions of this Agreement. 3. PERMITTED USES 3.1 The Licensee may: 3.1.1 make such local temporary copies of the Licensed Material as are necessary to ensure efficient use of the Licensed Material by Authorised Users, provided that such use is subject to all the terms and conditions of this Licence; 3.1.2 provide Authorised Users with integrated access and an integrated article author, article title and keyword index to the Licensed Material and all other similar material licensed from other publishers; 3.1.3 allow Authorised Users to: 3.1.3.1 access the Licensed Material by on site in order to search, retrieve, display and view the Licensed Material; 3.1.3.2 electronically save parts of the Licensed Material; 3.1.3.3 print out double copies of parts of the Licensed Material; 3.1.3.7 provide single printed or electronic copies of single articles at the request of individual Authorised Users; 3.13.8 input and store the publications and thereby to make the Publications available to its staff that work at its Registered Address (“authorised users”.) 3.1.3.8 FPI shall allow Killem to deliver to its authorised users: (i) all the Information in the Publications (“full text”); or (ii) abstracts of the full text or selected full text; or (iii) any combination of (i), (ii) or (iii) above. 3.2. Killem shall attribute each item to FPI. 4. RESTRICTIONS 4.1 Save as provided herein, the Licensee and Authorised Users may not: 4.1.1 sell or resell the Licensed Material unless the Licensee or an Authorised User has been granted prior written consent by the Publisher to do so; 4.1.3 alter, adapt or modify the Licensed Material, except to the extent necessary to make it perceptible on a computer screen, or as otherwise permitted in this Agreement. For the avoidance of doubt, no alteration of the words or their order is permitted; 4.1.4 display or distribute any part of the Licensed Material on any electronic network, including without limitation the Internet and the World Wide Web, and any other distribution medium now in existence or hereinafter created. 4.1.5 use all or any part of the Licensed Material for any Commercial Use. 4.2 This Clause shall survive termination of this Agreement for any reason. 5. RESPONSIBILITIES OF THE PUBLISHER 5.1 The Publisher agrees: 5.1.1 to make the Licensed Material available to the Licensee and Authorised Users within a maximum of one year from the signature of this agreement. 5.1.3 to use all reasonable endeavours to make the Licensed Material available to the Licensee and Authorised Users on a twenty-four hour basis seven days a week, save for routine maintenance, and to restore access to the Licensed Material as soon as possible in the event of an interruption or suspension of the service; 5.1.1 to provide for customer support services to Authorised Users using postal services and via the internet 5.1.6 to provide electronic product documentation to the Licensee free of charge. The Publisher will allow copies of all documentation to be made and distributed by the Licensee to Authorised Users provided it is either duplicated in full. 5.2 The Publisher reserves the right at any time to withdraw from the Licensed Material any item or part of an item for which it no longer retains the right to publish and for which the Publisher has been unable to secure the provisions as set out in Clauses 10.7 and 10.8, or any item or part of an item for which the Publisher has reasonable grounds to believe it infringes copyright or is defamatory, obscene, unlawful or otherwise objectionable. The Publisher shall give written notice to the Licensee of such withdrawal. The publisher should exert all effort to find a substitute library or organization that could provide an equally qualified service in case any withdrawal happens. 6. RESPONSIBILITIES OF LICENSEE 6.1 The Licensee agrees to: 6.1.1 issue passwords or other access information only to Authorised Users and use all reasonable efforts to ensure that Authorised Users do not divulge their passwords or other access information to any third party; 6.1.1 ensure that only Authorised Users are permitted access to the Licensed Material; 6.1.2 ensure that all Authorised Users are made aware of and undertake to abide by the terms of this Agreement; and 6.1.3 accept liability, including consequential losses, for any intentional actions or for any condoning acts of its authorized users to violate the copyright law. 6.2 Nothing in this Agreement shall make the Licensee liable for breach of the terms of this Agreement by any Authorised User provided that the Licensee did not cause, knowingly assist or condone the continuation of such breach after becoming aware of an actual breach having occurred. 7. FEE 7.1 The Publisher will invoice the Licensee for the Fee payable 7.2 The terms of payments to the Publisher are set out in Schedule 1 hereto. 7.3 The annual licence fee is $ 50,000 which should be billed monthly with the maximum amount per billing of one-twelfth of the full amount. The first monthly licence fee shall be paid by Killem within thirty (30) days of initial signature of the contract and subsequent monthly payment shall start after one month. 8. TERM AND TERMINATION 8.1 This Agreement shall take effect on execution hereof, or on 30th April, whichever is the earlier, and shall continue until the expiration of three (3) years there from. It shall continue for a further term or terms of one (1) year unless either party gives the other not less than ninety (90) days’ notice in writing prior to the expiration of the initial term or any additional term or terms. 8.2. In addition to any remedy, the Publisher may terminate this Agreement immediately without further obligation in the event of: (i) breach of this Agreement, the estimated amount of which should at least be equal to one-twelfth (1/12) of the annual fee and which cannot be remedied or is not remedied within thirty (30) days of the party in breach being requested to do so; (ii) any resolution being passed or petition being presented to wind up Killem’s business (otherwise than for reconstruction or amalgamation) or a receiver being appointed of the whole or part of its assets; or 8.3 Termination of the Agreement for any reason shall oblige Killem to erase the Publications from its premises. Owner has the right to enter Killem’s premises at reasonable business hours to ensure that this Clause has been complied with. 8.4 On termination of this Agreement, the Publisher will be required to reimburse the Licensee a pro rata proportion of the then remaining Fee for the unexpired part of the Subscription Period. 9. CONFIDENTIALITY AND PRIVACY 9. 1 All matters contained in this Agreement and any associated information and the parties shall treat documentation as confidential unless such matters are or become within the public domain. This obligation shall survive the termination of this Agreement. 9.2 The Publisher must make it sure that authorised users of the licensee must have their privacy protected and their identities should not be disclosed to any other person except when to defend each of the parties in any litigation involving said parties. A strict rule on confidentiality of regarding the license should be observed by the Publisher in the same way that it licensee should exclusively use only the services provided by the Publisher pursuant to the provisions of the license. This part of the agreement shall survive any expiration or any termination of the license. 10. FORCE MAJEURE 10.1 FPI shall be under no liability for any loss or for any failure to perform any obligation hereunder due to causes beyond its control including, but without limitation, industrial disputes of whatever nature, acts of God, hostilities, or any circumstances which it could not reasonably foresee and provide against. 10.7 In case the Publisher loses the right to publish because of the expiration of its contact to publish with any library or organisation from which it acquired rights and because of expiration of contracts or any other valid reason to reasonably end a contract under existing laws. 10.8 In case the Publisher will discover that the library or organisation from which it contracted to provide the licensed material has actually no right or has eventually no right and from which Publisher could be liable for copyright laws or should it find any other ground violations under existing law for which it could he held liable to the licensee. (Note: 10.7 and 10.8 could be renumbered to 10.2 and 10.3 to allow correct series of the provisions. All other clauses could also be renumbered to allow the same purpose but for purposes of this assignment original number of clauses are preserved except for additions and deletions which need to changed.) 11. MISCELLANEOUS PROVISIONS 11.1 This Agreement shall be governed by and construed in accordance with the law of California, and the parties irrevocably agree that any dispute arising out of or in connection with this Agreement will be subject to and within the jurisdiction of the Californian courts. 11.2 All notices required to be given under this Agreement shall be given in writing in Spanish or in English and sent by post to the relevant addressee at its address, and all such notices shall be deemed to have been received three (3) days after the date of posting . 11.3 In no event may either party bring any action against the other arising out of this Agreement more than one month after the claim for action arises. SCHEDULE 1: FEE 1. During the time of this Agreement, Killem shall pay to FPI an annual licence fee of $50,000 p.a. FPI reserves the right to alter the licence fee after year of contract. It shall give written notice to Killem of any such change. The revised fee shall then apply for the subsequent year. A 10% discount on the fee shall apply if the licence fee is paid in dollar bills, sent by registered post to FPI’s address and also via bank transfer or credit card system. The licence fee shall be paid within thirty (30) days of FPI rendering its invoice to Killem. 2. The Fee is shown exclusive of VAT, which will be payable in addition by the Licensee. SCHEDULE 2: THE PUBLICATIONS 1. The Database shall be updated with new materials at least once a month. 2. The licence granted to Killem under this Agreement shall permit any full-time member of Killem staff to: install and maintain the Database on Killem’s own equipment; make up to 1,000 searches p.a. on the Database; make copies (print or electronic) only as may be necessary to use the Database for internal business purposes only. 3. No more than ten (note: This is subject to negotiation depending upon the needs of the Killem) members of Killem staff may access the database at any one time. “Staff” is defined as an employee of Killem. 4. The Database may not be accessed, used or maintained at any site not owned or controlled by Killem without the prior written consent of FPI. 5. Killem shall take all necessary steps to restrict access to the Database to those permitted under Clause 5 of this Agreement. Killem hereby grants FPI the right to audit at reasonable California business hours use of the Database to ensure compliance with this Agreement, including, without limitation, the identities and numbers of users permitted to use the Database. IN WITNESSES the hands of the above parties on the date first above written: - SIGNED by: ________________________ Name: (Signature) Position: for and on behalf of [PUBLISHER] SIGNED by: ________________________ Name: (Signature) Position: for and on behalf of [LICENSEE] Appendix B. Principles for Licensing Electronic Resources (http://www.arl.org/scomm/licensing/principles.html ) 1. A license agreement should state clearly what access rights are being acquired by the licensee--permanent use of the content or access rights only for a defined period of time. 2. A license agreement should recognize and not restrict or abrogate the rights of the licensee or its user community permitted under copyright law. The licensee should make clear to the licensor those uses critical to its particular users including, but not limited to, printing, downloading, and copying. 3. A license agreement should recognize the intellectual property rights of both the licensee and the licensor. 4. A license agreement should not hold the licensee liable for unauthorized uses of the licensed resource by its users, as long as the licensee has implemented reasonable and appropriate methods to notify its user community of use restrictions. 5. The licensee should be willing to undertake reasonable and appropriate methods to enforce the terms of access to a licensed resource. 6. A license agreement should fairly recognize those access enforcement obligations which the licensee is able to implement without unreasonable burden. Enforcement must not violate the privacy and confidentiality of authorized users. 7. The licensee should be responsible for establishing policies that create an environment in which authorized users make appropriate use of licensed resources and for carrying out due process when it appears that a use may violate the agreement. 8. A license agreement should require the licensor to give the licensee notice of any suspected or alleged license violations that come to the attention of the licensor and allow a reasonable time for the licensee to investigate and take corrective action, if appropriate. 9. A license agreement should not require the use of an authentication system that is a barrier to access by authorized users. 10. When permanent use of a resource has been licensed, a license agreement should allow the licensee to copy data for the purposes of preservation and/or the creation of a usable archival copy. If a license agreement does not permit the licensee to make a usable preservation copy, a license agreement should specify who has permanent archival responsibility for the resource and under what conditions the licensee may access or refer users to the archival copy. 11. The terms of a license should be considered fixed at the time the license is signed by both parties. If the terms are subject to change (for example, scope of coverage or method of access), the agreement should require the licensor or licensee to notify the other party in a timely and reasonable fashion of any such changes before they are implemented, and permit either party to terminate the agreement if the changes are not acceptable. 12. A license agreement should require the licensor to defend, indemnify, and hold the licensee harmless from any action based on a claim that use of the resource in accordance with the license infringes any patent, copyright, trade-mark, or trade secret of any third party. 13. The routine collection of use data by either party to a license agreement should be predicated upon disclosure of such collection activities to the other party and must respect laws and institutional policies regarding confidentiality and privacy. 14. A license agreement should not require the licensee to adhere to unspecified terms in a separate agreement between the licensor and a third party unless the terms are fully reiterated in the current license or fully disclosed and agreed to by the licensee. 15. A license agreement should provide termination rights that are appropriate to each party. Read More