Glossary

A · C · E · G · I · K · L · N · O · P · Q · R · S · T

A

As-is clause

A clause saying the IP comes as it stands. Clause 11.3 excludes every warranty except the two in clauses 11.1 and 11.2, and, as far as the law allows, every term the law would otherwise imply. Tregarth relies instead on the warranties Kelderwick gave in the SPA. Licence 11.3 · Chapter 9 · see Knowledge warranty

C

Carve-out

The sale of one business out of a group. IP that only the business sold uses usually goes with it. IP the rest of the group still needs stays with the group, and the business sold gets a licence. Chapter 1 · see Licence

Change of name

The Sheffield company must take “Kelderwick” out of its company name by month 3 (clause 3.2). Tregarth, its only shareholder, signs a written resolution, and the new name takes effect when Companies House issues a new certificate. A copy goes to Kelderwick IP within five Working Days. Licence 3.2 · Chapter 3 · see Rebranding Plan

Competition law

The rules against agreements that restrict trade, such as limits on where a licensee may sell. UK law covers the UK side, and EU law may apply because clause 8 limits the Sheffield company's sales from Ireland into other EU countries. A specialist checks clauses 8.1, 8.2 and 10.5. Chapter 8 · see Territory, No-challenge clause

Confidentiality

The Sheffield company's duty to keep the Know-How secret (clause 5.2). It may use the Know-How only for the existing range, and show it only to employees, group companies and subcontractors who need it and are bound as strictly. The duty lasts as long as the information stays secret. Licence 5.2 · Chapter 5 · see Know-how, Trade secret

E

Exclusive licence

A licence that keeps everyone else out of its scope, the owner included (section 29(1) of the Trade Marks Act 1994). Under clause 2.4, only the Sheffield company may use the marks on these pumps in the UK and Ireland during the Term. Not even Kelderwick IP may. Licence 2.4 · Chapter 2 · see Non-exclusive licence

Extension Fee

The price of keeping KelderPlan after the Term: £30,000 for each month of the extension, paid in advance on the first day of the month (clause 9.2). No fee is due for a month that begins after the Software Period has ended. It is the only money the Licence charges. Licence 9.2 · Chapter 7 · see Software Period, Royalty-free

G

Goodwill

The custom and reputation that bring buyers back to a brand. Clause 10.1 gives Kelderwick IP all the goodwill from the Sheffield company's use of the marks. So the factory builds Kelderwick's name, not its own, and gains no right to the name when the licence ends. Licence 10.1 · Chapter 3 · see Rebranding Plan

Grant

The clause of a licence that gives the permission. It answers four questions: what may be used, on which products, where and for how long. Clause 2 makes three grants, for the brand, the know-how and KelderPlan, and clause 2.5 keeps everything else with the owner. Licence 2.1 · Chapter 2 · see Licensed Products, Territory

I

Improvement

A change to a pump, or to how it is made, that the Sheffield company develops from the Know-How during the Term. The Sheffield company owns it and must describe it in writing within two months after its first use in production. Kelderwick IP gets a licence back. Licence 1.1, “Improvement” · Chapter 6 · see Licence back

K

Know-how

Technical information a business keeps to itself, such as how it makes and tests a product. It is protected only while it stays secret. Here the Know-How is the factory's drawings, specifications, test methods and other papers for the existing range, listed in Schedule 2. Licence 1.1, “Licensed Know-How” · Chapter 5 · see Confidentiality, Perpetual licence

Knowledge warranty

A promise limited to what the giver knew. In clause 11.2 Kelderwick IP promises that, as far as it knew at completion, using the IP as the Licence allows infringes nobody else's rights. A rival right it did not know of is no breach. Licence 11.2 · Chapter 9 · see As-is clause

L

Lawful user

Someone entitled to use a program. Under the Copyright, Designs and Patents Act 1988, a lawful user has a few rights that a contract cannot take away, such as making a back-up copy. Clause 7.2 respects them, and a question about them goes to your supervisor. Chapter 7 · see Object code

Liability cap

The most a party can be made to pay under a contract. Clause 11.4 caps each side's liability at £250,000. Clause 11.6 leaves four claims uncapped: death or personal injury caused by negligence, fraud, use of the IP the Licence does not permit, and a breach of clause 5. Licence 11.4 · Chapter 9 · see Confidentiality

Licence

Permission to use IP that someone else owns and keeps. A licence moves permission, never ownership. In this deal one document, the Licence, holds three licences: the brand for two years, KelderPlan for two years or up to three months more, and the know-how for ever. The Licence · Chapter 1 · see Licensor, Licensee, Grant

Licence back

A licence from the licensee to the licensor to use what the licensee has made. Under clause 6.3 Kelderwick IP and its group may use each Improvement worldwide, for ever and free. It is non-exclusive, so the Sheffield company can still use the change and license it to others. Licence 6.3 · Chapter 6 · see Improvement

Licensed Products

The pump models the factory makes on the day of the Licence, and their spare parts. The marks and the know-how may be used only on these. A new pump designed by Tregarth is not a Licensed Product. Licence 1.1, “Licensed Products” · Chapter 2 · see Grant

Licensee

The business that gets permission to use IP under a licence. Here it is the Sheffield company, the factory Tregarth buys. The company changes its name in month 3, but this workbook keeps calling it “the Sheffield company”. Licence, Parties · Chapter 1 · see Licensor

Licensor

The owner who gives permission to use its IP. Here it is Kelderwick IP, the group company that owns Kelderwick's brand, know-how and software. It stays in the seller's group after the sale. Licence, Parties · Chapter 1 · see Licensee

N

No-challenge clause

A promise not to attack the licensed marks. Under clause 10.5 the Sheffield company may not challenge the marks or Kelderwick IP's ownership of them during the Term, or help anyone else to. It can raise competition-law questions, so it goes to the same specialist check as the Territory. Licence 10.5 · Chapter 9 · see Competition law

Non-exclusive licence

A licence that leaves the owner free to use the same rights and to license them to others. The know-how licence is non-exclusive because the group's 14 other factories use the same drawings. The KelderPlan licence is non-exclusive too. Licence 2.2 · Chapter 2 · see Exclusive licence

O

Object code

The form of a program that a computer runs and people cannot read. Clause 2.3 licenses KelderPlan in object code only, so the factory can run the software but cannot fix or adapt it. Licence 2.3 · Chapter 7 · see Source code

P

Perpetual licence

A licence with no end date. The know-how licence in clause 2.2 is perpetual and irrevocable, because a factory cannot unlearn how it makes its pumps. It covers only the existing range, and even a leak of the Know-How cannot end it (clause 12.4). Licence 2.2 · Chapter 2 · see Know-how

Q

Quality Notice

Kelderwick IP's formal notice that a batch has failed the Quality Standards (clause 4.3). The Sheffield company must then hold the batch, remedy the cause within 30 days and re-test it. If the cause is not remedied in time, Kelderwick IP may end the brand licence. Licence 1.1, “Quality Notice” · Chapter 4 · see Quality Standards, Sell-Off Period

Quality Standards

The rules in Schedule 5 for every pump that carries the brand. Each pump is made to the Know-How's drawings and specifications, with parts from approved suppliers, and is pressure-tested. Samples from each batch are performance-tested, and one failed sample fails the whole batch. Licence, Schedule 5 · Chapter 4 · see Quality Notice

R

Rebranding Plan

The steps in Schedule 4 that move the Sheffield company onto its own brand, each with a deadline. The cheap, visible things change first, from the company name by month 3, and the pumps' labels last, by month 24. A missed step is a breach of the Licence. Licence, Schedule 4 · Chapter 3 · see Change of name, Goodwill

Recording a licence

Entering a licence of a trade mark on the UK IPO's register (section 25 of the Trade Marks Act 1994). Until an application is made, the licence does not bind a person who later gets a conflicting right in the mark without knowing of it. Clause 10.3 lets the Sheffield company apply. Licence 10.3 · Chapter 3 · see Licence

Royalty-free

With no payment for each product made or sold. All three licences are royalty-free, because Tregarth paid for the factory in the share price (clause 9.1). The only charge is the Extension Fee for keeping KelderPlan after the Term. Licence 9.1 · Chapter 9 · see Extension Fee

S

Sell-Off Period

The three months after the Term in which the Sheffield company may sell branded pumps made in the Term (clause 13.1). Sales stay inside the UK and Ireland. There is no sell-off for a batch under a Quality Notice, or after Kelderwick IP ends the brand licence under clause 12.2. Licence 13.1 · Chapter 10 · see Quality Notice

Share purchase agreement

The contract by which Tregarth buys all the shares in the Sheffield company from Kelderwick, called the SPA. It is signed and completed on 1 April 2026. The Licence was agreed in final form alongside it and is signed at completion. Licence 1.1, “Share Purchase Agreement” · Chapter 1 · see Transitional services agreement

Software Period

The time for which the Sheffield company may use KelderPlan. It ends on 31 March 2028, unless a notice given by 31 January 2028 extends it once, to 30 June 2028 at the latest. The Sheffield company may end it sooner, at the end of any month. Licence 7.1 · Chapter 7 · see Extension Fee

Source code

A program as its programmers wrote it, which people can read and change. Kelderwick IP keeps KelderPlan's source code and need not hand it over (clause 7.2). Tregarth could accept that, because the factory needs KelderPlan to work as it is, not to change it. Licence 7.2 · Chapter 7 · see Object code

T

Territory

The area where the Sheffield company may use the Kelderwick brand: the UK and Ireland. Ireland is in because the factory has always supplied it and Kelderwick has no distributor there. Pumps under the factory's own brand may be sold anywhere (clause 8.3). Licence 1.1, “Territory” · Chapter 8 · see Competition law

Trade secret

Information that is secret, valuable because it is secret, and kept secret by reasonable steps. The Trade Secrets (Enforcement, etc.) Regulations 2018 add remedies for one. The steps in clause 5.4, such as limiting access and marking documents confidential, help the Know-How qualify. Chapter 5 · see Know-how, Confidentiality

Transitional services agreement

A separate contract under which Kelderwick's group keeps giving the factory IT support for a limited time. Support for KelderPlan comes only under it. So if the Software Period is extended, support must run on for the same months. Licence 1.1, “Transitional Services Agreement” · Chapter 1 · see Software Period