Freedom Agreement

Benefits

Freedom Agreement Benefits

Licenses protect from future NPE lawsuits based on patents sold by Freedom Agreement participants

Free to participate

Patents retain their full value while they remain held by operating companies

Flexible — participants have an opportunity to withdraw every two years

How It Works

Freedom Agreement participants receive licenses, releases, and covenants-not-to-sue to patents divested by other participants.

These protections are narrowly tailored to permit use of a divested patent only if an NPE asserts the patent against any Freedom Agreement participant.

The Freedom Agreement is open to any company that wants to join, regardless of size or type. There are no prerequisites. A company that executes the Freedom Agreement, along with its affiliates, are participants in the Freedom Agreement.

What are the obligations of a Freedom Agreement participant?

Only when a participant divests a patent does it grant a limited license, release, and covenant-not-to-sue to other participants. The effects of those licenses are only triggered if a divested patent is subsequently asserted by an NPE against a participant. However, if a participant does not divest a patent, no license, release, or covenant is granted.

Does participation in the Freedom Agreement affect the value of a company’s patents?

The Freedom Agreement is designed to maximize retention of patent value through the limited nature of its licenses, releases, and covenants. Patents retain their full value in all circumstances as long as they are not divested. Even after divesture of a patent, the licenses, releases, and covenants granted under the Freedom Agreement are only triggered if an NPE asserts the divested patent against a Freedom Agreement participant.

How does the Freedom Agreement preserve flexibility for companies in the event of changing circumstances and priorities?

New participants commit to an initial term of two years. While participation automatically renews for two-year terms, a company that signed the Freedom Agreement may provide notice to withdraw within 90 days following the end of any two-year period. Withdrawal is effective with respect to the company and its affiliates one year after the company provides notice.

If a participant is the subject of a potential merger or acquisition that would result in that entity being held or controlled by a non-participant in the Freedom Agreement, the entity can withdraw immediately by providing written notice in advance of the transaction.

Upon withdrawal, a former participant’s non-divested patents are no longer subject to the Freedom Agreement; no licenses, releases, or covenants are granted for divestures following withdrawal. However, a former participant also gives up future benefits of any licenses, releases, and covenants it received under the Freedom Agreement.

Benefits