Andrew Berger is an intellectual property litigator who uses his breadth of experience and creativity to protect his clients’ copyrights and trademarks from infringement. He has successfully resolved multiple IP litigations on behalf of his clients when their works were used without authorization. Many of these cases are at the cutting edge of the Internet and new technologies. Andrew also helps his clients monetize their intellectual property through licensing, joint ventures, sales and related transactions.
For the last five years Andrew has been an adjunct professor of law at Cornell Law School teaching a seminar in copyright litigation.
In addition, Andrew has for more than twenty-five years mediated IP cases for the Southern District Mediation Office and for parties in private mediations.
Further, Andrew has successfully litigated many complex commercial matters, including on behalf of the Government of Ecuador, the Women’s Professional Tennis Association and a Channel Islands investment company.
Andrew graduated from Cornell University and Cornell Law School and served as president of the Cornell Law Association, the alumni body representing the graduates of that school.
Andrew has also been a leader in national intellectual property organizations. In 2014, he co-founded and then served a two-year term as the inaugural chair of the Intellectual Property Institute. Andrew and the other members of the Intellectual Property Institute are Fellows of the Litigation Counsel of America, a trial lawyer honorary society, who practice intellectual property litigation in firms across North America. The mission of the Intellectual Property Institute is to promote the peer-to-peer professional development of its members. Andrew also served for many years as trustee and member of the executive committee of the Copyright Society of the U.S.A. and as co-chair of the Copyright Subcommittee of the Intellectual Property Litigation Committee of the ABA’s Litigation Section. Andrew was named the most outstanding subcommittee chair of the Intellectual Property Litigation Committee and also won the Outstanding Service Award from the Copyright Society.
He has also lectured on copyright at John Marshall Law School in Chicago, on trademark at the New School and the Zicklin School of Business at Baruch College and on intellectual property protection at the Johnson Graduate School of Management at Cornell. Andrew’s peers have selected him each year since 2012 as a New York Super Lawyer in IP litigation.
He frequently writes and speaks about intellectual property topics before bar and industry groups, including the Copyright Society, the PLI Advanced Program on Copyright Law, the Cornell Entrepreneur Network, the American Conference Institute, the Federal Bar Council and the Litigation Counsel of America. He has been quoted in the Wall Street Journal and the National Law Journal about IP issues. Andrew writes an IP blog called IP In Brief commenting on trends and transformation in copyright and trademark.
Over forty years ago Andrew founded the Litigators Club, a group of about twenty-five lawyers in smaller firms. Its purpose is to meet with judges and other litigators to discuss matters of common concern regarding litigation practice in the federal and state courts. The judges from the Second Circuit who have been guests of the Litigators Club include Judges Leval, Livingston, Katzmann and Justice Sotomayor, before she joined the Supreme Court. Their most recent guests were Judge Sullivan of the Second Circuit and Judge Kathleen Forrest, formerly of the Southern District.
Andrew lives in in the Cobble Hill section of Brooklyn with his wife, a former federal prosecutor and their hyper-active dogs named Chloe and Duke.
Cornell University and Cornell Law School
- 2d Circuit Court of Appeals
- C.D. Cal.
- N.D. Cal.
- S.D. Cal.
- 9th Circuit Court of Appeals
Mr. Berger has successfully handled dozens of IP and commercial litigation matters, resulting in trial victories or favorable settlements for his clients. For example, Andrew:
Represented a medical illustrator in two copyright litigations against a German global publisher; resolved both matters after sending draft complaints to the prospective defendant
Represented another medical illustrator in copyright litigation in the District of Arizona against a cancer care company; settled the matter following discovery and before trial
Represented a Canadian clothing importer by first setting aside the default judgment entered against it in the Southern District of NY and then settling the matter for approximately 20% of the vacated judgment
Represented a photographer in a six-year litigation against a leading American publisher in a case that twice went to the Second Circuit Court of Appeals and also generated a petition for certiorari to the Supreme Court
Represented an American manufacturer in state court through trial in an employment case brought by a former employee; after most of plaintiff’s claims were dismissed during the first day of trial, the matter settled favorably on the second day before cross examination of plaintiff began
Represented a women’s professional sports association and its members in state court litigation in NY and in the mediation thereafter that resolved the matter
Represented a Latin American government in litigation against it in the Western District of Pennsylvania; overturned default judgment against the client and after a two-day hearing had the matter dismissed.
Represented a California film maker in litigation brought by a post-production house. On the eve of trial, convinced the plaintiff to dismiss the case with prejudice
Represented a Channel Island investment company in securities litigation in the Southern District of NY involving an interest rate futures spread scheme; settled client’s claim for “93.99% of the claimed losses” as reported in Cresswell v. Sullivan & Cromwell, 704 F. Supp. 392, 399 (S.D.N.Y. 1989)
Represented a group of employees in ERISA litigation who, after their termination from a former employer, went to work for the new employer in the same jobs, location and salary as before. Established at trial, despite the absence of any written severance plan, that clients were entitled to severance under ERISA and that the denial of severance was arbitrary and capricious, as reported in Bennett v. Gill & Duffus Chemicals, Inc., 699 F. Supp. 454 (S.D.N.Y. 1988)
Ten Considerations to Keep in Mind When Negotiating a License Agreement
By Andrew Berger
This article summarizes a webinar of counsel Andrew Berger co-presented with Rand Brenner, President & CEO at Licensing Consulting Group on June 12, 2020, focusing on the top 10 considerations to keep in mind when negotiating a license agreement. Rand counsels clients in the acquisition and sales of licensing rights and is the author of Hidden Wealth: The Money Making Power of Licensing. For a video of Andrew and Rand’s webinar, click here.
1. The License Agreement Must Be a Win-Win for Both Sides or It Will Not Work
One-sided deals don’t last. Often one’s instinct is to negotiate to one-up or take advantage of the other side. But long term, if you bleed the other side with excessive demands or impose conditions and restrictions that are too onerous, the relationship will abort. For your licensing partnership to endure there needs to be a give and take.
Sure, you want the best deal; but put yourself in the other side’s shoes. They may need some help, especially these days with unemployment reaching record highs. If you are not flexible in your demands, you may find yourself a creditor in Bankruptcy Court. Think JCPenney and Neiman Marcus, to name a few.
2. The More Either Party to the License Does Not Need to Do the Deal the More Leverage that Party Has When Negotiating It
As they say in banking circles, if you don’t need a loan, you will be the first to get it. The same in licensing. If this is a deal you have to have, you may be compelled to agree to one-sided terms you may regret. So you should set your limits before you start and be ready to walk if the other side demands you exceed those limits.
Although you may think this is a once-in-a-lifetime opportunity, you always have options no matter what side of the negotiating table you are on. Think what your best alternative to this agreement is. You have one. And the better your alternative, the greater your ability to improve the terms of this agreement. So don’t be afraid to raise the stop sign when the other side seeks to take advantage. When you signal you are ready to walk, the other side may suddenly try to pull you back. If they don’t, keep walking.
3. Quality Matters: The Licensor Must Monitor Product Quality to Ensure It Is Consistent With the Licensed Brand
As Jeff Bezos famously said, your brand is what people say about you when you’re not in the room. In other words, your brand is your reputation. To maintain it, your brand has to reflect product quality and must also be trustworthy, distinctive, relevant, consistent, ethical and fair.
To ensure quality, the licensor must monitor the product the licensee is distributing. The licensor must also oversee the licensee’s conduct and marketing messages to confirm that they reflect the brand’s attributes. Together, both parties to the license agreement are brand ambassadors, sharing the responsibility to protect and promote brand quality and integrity.
If the licensee has the right to use the licensor’s trademark in connection with the licensed product, the licensor’s obligation to monitor product quality is even greater. The licensor must make sure that it is identified in the public eye as the source of the product. Insufficient quality control (so-called “naked licensing”) can result in the abandonment of the licensed trademark. See Barcamerica Int’l USA Trust v. Tyfield Importers, Inc., 289 F.3d 589, 596 (9th Cir. 2002) (“Where the licensor fails to exercise adequate quality control over the licensee, ‘a court may find that the trademark owner has abandoned the trademark, in which case the owner would be estopped from asserting rights to the trademark.’”).
Finally, to confirm your licensees understand your rules of the road, you may want to insert a clause in your license agreement along these lines:
Licensee agrees that the nature and quality of the products licensed will meet or exceed the standards set by Licensor. Licensee’s failure to conform to these quality controls may result in the termination of this License Agreement.
4. Givers Get, if Your License Grants Exclusivity, You Should Receive a Higher Royalty
Royalties reflect the marketplace and are a function of a number of factors. But there is one clear rule; if you give, you get. So, if you grant your licensee an exclusive, your royalty needs to reflect that exclusivity and be higher than the royalty you would otherwise have charged multiple licensees. Why? Because when you give an exclusive you forgo other opportunities and limit your revenue source to one.
Exclusive licensees will also pay more because they now have a market advantage otherwise hard to get, uniqueness. They are the only ones distributing the licensor’s product.
But before you, as licensor, grant an exclusive, take a deep breath. Ask yourself if you want to tie yourself exclusively to the licensee. Also ask your lawyer if your termination clause allows for an easy exit or at least permits you to convert to a non-exclusive license if the licensee does not generate whatever monetary benchmarks you have set in the license agreement.
5. Before Entering Into a License Each Party Should Have an Exit Strategy.
Each party to a license agreements looks forward to a mutually satisfactory relationship. But we know that things change and pandemics happen. So each side needs to decide, before signing the agreement, when to exit. There is no one exit strategy. Maybe it will be when one of the parties to the license has satisfied its profit projections. Maybe the exit will be in a few years when the product being licensed is expected to lose its market appeal or competitive edge. In any case, no licensing agreement is forever and better, before each party begins the relationship, to decide when and how to end it. And if either party to the license is a startup hoping to attract early investors, they will be especially interested to learn your exit strategy before they invest.
6. The Duration of the License Should Allow the Licensee a Reasonable Time to Recoup Its Investment in the Deal.
The costs for a licensor and license differ. A licensor has few fixed costs at the outset of a licensing deal. That’s because the licensor is authorizing the licensee to market what the licensor already has, the licensed product or service. But the licensee has to make a considerable investment before it sees any profit. A licensee’s fixed costs include salary, distribution expenses, advertising and quality control costs, as well as a portion of the overhead. A licensee’s investment may also include manufacturing the licensed product according to the standards set by the licensor. All these costs may be considerable and can only be recouped over time. So the licensor needs to give the licensee a reasonable time to recover those costs if the license is to be a win-win for both.
7. Do Your Homework: Find Out the Royalty Other Licensees Are Paying to License Similar Products Under Similar Terms.
Forget about determining the perfect royalty. It doesn’t exist. But the parties to a licensee can reach agreement on a fair royalty by looking at comparables. What royalty have other parties agreed to when distributing similar products or marketing similar services in similar territories over comparable periods of time. To gain that market knowledge maybe you need to retain an expert like Rand or speak to your friends in similar businesses or your trade association. There are benchmarks out there and, though it make take some digging to find them, they will guide your negotiation as you fix the royalty.
Here are a few royalty options. You might negotiate an escalating royalty. It allows the licensee to keep more proceeds at the beginning of the agreement and then pay increasingly more to the licensor as it continues. This royalty works best when the licensee is poorly capitalized and needs to retain revenues at the beginning of the agreement to increase production.
Use a de-escalating royalty when the parties expect sales and therefore royalties to increase over time so that increased revenues trigger a lower royalty rate. A de-escalating royalty also creates an incentive for the licensee to become successful quickly to qualify for the lower rate.
A licensor might also include minimum payments along with a royalty. This structure ensures certainty for the licensor and is especially useful when the product is new and untested and therefore its ability to generate revenues and royalties is uncertain.
Whatever royalty is agreed to, the licensor should include in the agreement a right to audit the books of the licensee to ensure compliance with the license terms.
8. Discuss Money After Agreeing to Other Issues.
Yes, money is important. But you will best be able to reach agreement on a fair royalty after discussing key other elements of a license such as geography, term, exclusivity and licensed rights. Think of it this way, when you negotiate to buy a house, you consider a number of factors that help determine price, such as location, square footage, # of bedrooms, outdoor space and the like. All these elements in combination help you make a fair offer. The same in a license. If you want global rights as opposed to a limited geographical region, those rights will cost more assuming the licensor is willing to give you those rights. If you want a long term deal with no right to terminate if you meet minimum sales goals, that will also cost you. So first reach agreement regarding the bundle of rights in your license. That bundle will help you then fix a price.
9. Whether Licensor or Licensee, Negotiate with Respect to Build Trust.
Trust is hard to get and is easily lost; but the effort to gain trust in a relationship is always worth it.
Sure, you should confirm your relationship with a signed license agreement. That agreement will be useful to resolve disputes down the road. But the day-to-day relationship between licensor and licensee is fueled and aided by trust and respect, not by a signed agreement. And the best way to gain trust is to keep your promises and not overstate. At each stage of the negotiation the other side is appraising you, asking “can I do a deal with this person.” It’s more likely the answer will be “yes” the more trustworthy and respectful you are at each stage.
10. Take Your Time to Ensure the License Agreement Creates a Long-Term, Mutually-Beneficial Relationship.
A license agreement is a bit like a marriage. Two sides join together for mutual advantage. Sure your business courtship might be brief; but the better course is to take your time. Due diligence is not simply a matter of looking at the hard numbers but answering the question “should I partner with the other side.” To answer that question you need to form a relationship with the other side. That means in person communication and socializing in a relaxed setting where you both can let you hair down a bit and share your concerns and maybe even your fears. Investing that time and effort before you reach agreement will pay dividends down the road when the unexpected happens, which it will.
Comments, questions welcome to firstname.lastname@example.org
- Brooklyn Heights Synagogue Member of the Executive Committee and First Vice President 2010-2014; Trustee 2016 to present