This series addresses the needs the legal community has for technology licensing knowledge by laying out basic concepts, identifying traps for the unwary and offering drafting and negotiating tips. Click here to read parts one, two, three and four.

In every licensing transaction, the parties need to address how they will deal with third parties who may be infringing the underlying intellectual property. Both parties usually have an interest in addressing infringement, but the specifics of their interests can sometimes vary significantly. In addition, the case law is filled with alleged third-party infringers challenging a party's standing to sue them. To avoid uncertainty and the related litigation costs, it is critical for a license agreement to provide clarity regarding the parties' respective enforcement rights against infringers.

When negotiating these enforcement rights in the context of a license agreement, there are two central, and interdependent, issues—standing and control. The parties also need to address who will pay and how any proceeds will be treated.