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Licensing Permitted Use 225 Licensor will want to limit licensee's use of the engine to certain applications. The licensor will need to confer many of the copyright rights discussed above, namely the rights to: create a derivative work, including the right to modify the original work; the right to duplicate and distribute the derivative work; and the right to sublicense the duplication and distribution to the required third parties (such as a publisher or OEM manufacturer). Typical terms of use include: · Game. The licensee may generally use the engine only to develop Game A and any localiza- tions. Are sequels, ports, and expansion packs (stand-alone and/or dependent?) included in the license? If not, what are the terms and fees for these additional products? · Distribution in Object Code Only. In addition to confidentiality provisions, an engine licensor will want to protect its product by only allowing the licensee to distribute the engine in object code as embedded in Game A. · Restrictions. Licensees must usually agree to other protective restrictions on their use of the technology, such as prohibitions against reverse-engineering or decompiling the technology, disclosing the source code to any third parties, and so on, as well as agreeing to make proper use of the licensor's trademarks ("proper" being defined in the license agreement). Fees Engine fees are usually broken down by title and platform. If there is a possibility that the game will be ported, and the licensor supports those platforms, negotiate the port fees in the original license. License fees for third-party engines are almost always non-recoupable and non-refundable--even if the game is terminated mid-development. It is always a good idea for the publisher to pay the licensor directly and recoup the cost as part of development expenses.