Does an exclusive license to resell prohibit the licensor themselves to sell the product in the same scope?

[70853n]

Assume a licensor grants an exclusive license to RESELL the agreement's 'Plan Offerings'. Does this legally bind the licensor to not sell the product under the scope of the license (e.g. in the same country), e.g. through their own website, or OTC?

Assume the licensee is granted at the same time a non-exclusive license to trademark. Can this be used to ensure the licensor is still able to sell the product on their own, nethertheless the exclusive license to resell?

 

[Just Blue]

Assume a licensor grants an exclusive license to RESELL the agreement's 'Plan Offerings'. Does this legally bind the licensor to not sell the product under the scope of the license (e.g. in the same country), e.g. through their own website, or OTC?

Assume the licensee is granted at the same time a non-exclusive license to trademark. Can this be used to ensure the licensor is still able to sell the product on their own, nethertheless the exclusive license to resell?

What state?

 

[quincy]

Assume a licensor grants an exclusive license to RESELL the agreement's 'Plan Offerings'. Does this legally bind the licensor to not sell the product under the scope of the license (e.g. in the same country), e.g. through their own website, or OTC?

Assume the licensee is granted at the same time a non-exclusive license to trademark. Can this be used to ensure the licensor is still able to sell the product on their own, nethertheless the exclusive license to resell?

What is the name of your state?

The agreements need to be read to understand what exactly is being granted (i.e., the scope of the license).

We cannot personally analyze legal documents on this forum. You will need to find an attorney licensed to practice in your area of the world for such a review.

“Exclusive licenses,” though, will transfer ALL rights to whatever has been transferred. No one else can exercise those rights without express authorization from the rights-holder.

 

[PayrollHRGuy]

It will depend 100% on the wording of the agreements. There is no such thing as a universally used "exclusive license to resell".

 

[quincy]

There is, however, one definition of “exclusive license” as it applies to a transfer of rights.

 

[PayrollHRGuy]

There is, however, one definition of “exclusive license” as it applies to a transfer of rights.

Yes, but there isn't a single boilerplate agreement to do this.

 

[quincy]

Yes, but there isn't a single boilerplate agreement to do this.

True. The specific agreement needs to be read and analyzed.

 

[70853n]

Thanks for all for your replies. Exactly because the term 'exclusive' comes across vague to me, I need to understand what exactly it means in the following context:
I believe the state is New York. See Appointment 2., 2.1 and 2.2 of https://www.sedar.com/GetFile.do?lang=EN&docClass=13&issuerNo=00045108&issuerType=03&projectNo=02875466&docId=4519289

The IPO prospectus states:
"The Company (GlobeX Data Ltd.) is the exclusive worldwide distributor and license holder of a full suite of secure cloud-based storage, document management, encrypted emails and secure communication tools, primarily DigitalSafe, PrivaTalk and Custodia (collectively, the “Products”). The Company primarily sells the Products through resellers and other distribution channels such as managed service providers, Internet service providers, and telecommunication companies. The Products, all of which are in a commercialization stage and are current in use by customers, were developed by GlobeX Data S.A., a privately held Swiss based cyber security and secure communications company (previously defined as “GDSA”) and licensed to the Company. On May 7, 2017, the Company entered into a licensing agreement (previously defined as the “Global License Agreement”) with GDSA to market/distribute the Products globally except in the U.S. and Canada. From May 2017 to date, the Company has been conducting its 2017/2018 business development program. On March 29, 2018, the Company acquired 100% of the issued and outstanding securities of GlobeX US via a securities purchase agreement whereby the shareholder of the Company received 25,000,000 Common Shares as consideration. GlobeX US has an exclusive license with GDSA to market/distribute the products in the U.S. and Canada."

I want to understand whether the GlobeX Data S.A. (private entity, licensor) would still be legally allowed to sell the 'Plan Offerings' to customers in the same scope, e.g. U.S. and Canada (I understand they can do so in the excluded countries). Or might there be a sneaky loop hole where the licensor sells to the same markets as the licensee, i.e. the revenue circumvents the licensee and flows directly to the licensor?

Thanks again, I very much appreciate you taking the time!

 

[Just Blue]

Thanks for all for your replies. Exactly because the term 'exclusive' comes across vague to me, I need to understand what exactly it means in the following context:
I believe the state is New York. See Appointment 2., 2.1 and 2.2 of https://www.sedar.com/GetFile.do?lang=EN&docClass=13&issuerNo=00045108&issuerType=03&projectNo=02875466&docId=4519289

The IPO prospectus states:
"The Company (GlobeX Data Ltd.) is the exclusive worldwide distributor and license holder of a full suite of secure cloud-based storage, document management, encrypted emails and secure communication tools, primarily DigitalSafe, PrivaTalk and Custodia (collectively, the “Products”). The Company primarily sells the Products through resellers and other distribution channels such as managed service providers, Internet service providers, and telecommunication companies. The Products, all of which are in a commercialization stage and are current in use by customers, were developed by GlobeX Data S.A., a privately held Swiss based cyber security and secure communications company (previously defined as “GDSA”) and licensed to the Company. On May 7, 2017, the Company entered into a licensing agreement (previously defined as the “Global License Agreement”) with GDSA to market/distribute the Products globally except in the U.S. and Canada. From May 2017 to date, the Company has been conducting its 2017/2018 business development program. On March 29, 2018, the Company acquired 100% of the issued and outstanding securities of GlobeX US via a securities purchase agreement whereby the shareholder of the Company received 25,000,000 Common Shares as consideration. GlobeX US has an exclusive license with GDSA to market/distribute the products in the U.S. and Canada."

I want to understand whether the GlobeX Data S.A. (private entity, licensor) would still be legally allowed to sell the 'Plan Offerings' to customers in the same scope, e.g. U.S. and Canada (I understand they can do so in the excluded countries). Or might there be a sneaky loop hole where the licensor sells to the same markets as the licensee, i.e. the revenue circumvents the licensee and flows directly to the licensor?

Thanks again, I very much appreciate you taking the time!

For the third time, WHAT STATE?

 

[PayrollHRGuy]

II think you will find that GlobeX Data Ltd. & GlobeX US are a spin-offs of GlobeX Data S.A. that was created to market the product.

And while there may well be something in the license that allows S.A. to also sell, I'd be willing to bet dollars to donuts that it is there so SA can deal directly with the really large buyers. Think AWS, Alphabet, etc...

 

[PayrollHRGuy]

For the third time, WHAT STATE?

In this case the state really isn't going to matter.

 

[Taxing Matters]

Globe X Data S.A. (the Company) owns all of the shares of Globe X US. Globe X US is the company with the US and Canadian rights. Since it is owned by the Company in practical terms the Company is selling its products in the US and Canada, it's just through a subsidiary rather than directly. This is a very common way for a foreign company to distribute its products or services in the US.

 

[quincy]

“Exclusive,” according to Black’s Law Dictionary (6th Edition) means: “Appertaining to the subject alone, not including, admitting, or pertaining to any others. Sole. Shutting out; debarring from interference or participation; vested in one person alone. Apart from all others, without the admission of others to participation.”

An “exclusive license” is an exclusive right granted to licensee. An “exclusive licensee” is one granted the exclusive right and license. An “exclusive right” is one which only the grantee of the right can exercise - all others are prohibited or shut out.

We cannot analyze agreements or licenses on this forum. That is considered the practice of law and requires the services of an attorney licensed to practice in your own jurisdiction. It exceeds the scope of the forum.

 

[70853n]

II think you will find that GlobeX Data Ltd. & GlobeX US are a spin-offs of GlobeX Data S.A. that was created to market the product.

And while there may well be something in the license that allows S.A. to also sell, I'd be willing to bet dollars to donuts that it is there so SA can deal directly with the really large buyers. Think AWS, Alphabet, etc...

Thank you! I guess, if they attract a big customer in the U.S. and that customer happens to have an entity in Switzerland or one of the other excluded countries, they could strike the deal "for tax purposes" in those countries and circumvent the revenue around the exclusive licensee.
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For the third time, WHAT STATE?

[...]I believe the state is New York[...]

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We cannot analyze agreements or licenses on this forum. That is considered the practice of law and requires the services of an attorney licensed to practice in your own jurisdiction. It exceeds the scope of the forum.

Got it. Thank you very much for the definitions!

 

[quincy]

Thank you! I guess, if they attract a big customer in the U.S. and that customer happens to have an entity in Switzerland or one of the other excluded countries, they could strike the deal "for tax purposes" in those countries and circumvent the revenue around the exclusive licensee.
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Got it. Thank you very much for the definitions!

You’re welcome.

I recommend you consult with an attorney in your area for a complete review of the licensing rights that have been granted, if this is a matter that could be of legal consequence to you.