Perpetual IP Licenses and the One-Year Statute of Frauds: A License Is “Performed” When Granted (Absent an Express Covenant Not to Sue)

Case: Collision Commc'ns v. Nokia Solutions and Networks OY, 2026 N.H. 4 (N.H. Feb. 5, 2026)
Court: Supreme Court of New Hampshire (certified questions from the U.S. District Court for the District of New Hampshire)

1. Introduction

This opinion resolves a recurring statute-of-frauds question in technology transactions: whether an oral agreement granting a perpetual intellectual property license is unenforceable under New Hampshire’s one-year provision of the statute of frauds, RSA 506:2, because a “perpetual” arrangement necessarily extends beyond one year.

The dispute arose from negotiations between Collision Communications, Inc. (a Delaware corporation with its principal place of business in New Hampshire) and Nokia Solutions and Networks OY (a Finnish corporation). Collision claimed the parties formed an enforceable oral agreement during a June 6, 2017 call: Nokia would pay $3 million (non-recurring engineering fee) plus $20 million (license fee) in exchange for Collision integrating and licensing certain proprietary software. After later proposing a lower written license fee and ultimately canceling the project, Nokia raised a statute-of-frauds defense.

The federal district court certified three questions. The New Hampshire Supreme Court answered only the first—framing a decisive rule about when a perpetual IP license is “performed” for RSA 506:2 purposes—then declined to answer the part-performance and promissory-estoppel questions as non-determinative in light of its first answer.

2. Summary of the Opinion

The court held that it is possible to perform within one year the obligations imposed on the licensor by a perpetual intellectual property license, and therefore such a license does not necessarily fall within RSA 506:2’s one-year statute-of-frauds bar.

Crucially, the court reasoned that, absent express language to the contrary, a perpetual IP license does not impose continuing affirmative obligations on the licensor. Instead, it functions as a waiver of the licensor’s right to sue for infringement—akin to a discharge/release effective upon grant. Because the licensor’s relevant “performance” occurs upon the effective date of the license, the agreement is capable of full performance within one year.

Having answered Question 1 “yes,” the court declined to answer:

  • whether part performance applies to oral contracts that cannot be performed within one year; and
  • whether promissory estoppel requires proof that injustice can be avoided only by enforcing the promise.

3. Analysis

A. Precedents Cited

1) New Hampshire statute-of-frauds framework

  • Phillips v. Verax Corp., 138 N.H. 240 (1994): Cited for the baseline principle that RSA 506:2 requires a writing for agreements “not to be performed within one year,” and that the statute reaches only contracts that cannot be performed within one year “according to their terms.” This anchors the analysis in “possibility of performance,” not probability.
  • Proctor v. MacDonald, 141 N.H. 621 (1997): Supplies the controlling articulation of the test: a contract does not violate the statute if it was possible to complete performance within one year “without breach by either party.” The court uses this to reframe “perpetual” not as “necessarily longer than a year,” but as a question of when performance is complete.
  • Spaulding v. Mayo, 81 N.H. 85 (1923): Reinforces that the inquiry is whether the contract may be fully performed within a year, “not whether the parties expected that it would be.” This is important in commercial settings where parties commonly anticipate long-term relationships, but the legal test turns on theoretical performability.
  • Tsiatsios v. Tsiatsios, 140 N.H. 173 (1995): Cited for the post-verdict posture: the trial court examines statute-of-frauds applicability based on jury findings. Here, the jury found no perpetual support obligation, leaving the perpetual license itself as the key term for the statute-of-frauds analysis.

2) Defining “license” and translating it to the IP context

  • Waterville Estates Assoc. v. Town of Campton, 122 N.H. 506 (1982): The court notes its real-property definition of “license” as “transient or impermanent” and “revocable,” then explains why that definition is “of little utility” for intellectual property, where licenses can be permanent and irrevocable. The opinion thus clears doctrinal space to treat IP licenses differently from land-use licenses.

3) Licenses as covenants not to sue—and when that matters

  • Transcore v. Electronic Transaction Consultants, 563 F.3d 1271 (Fed. Cir. 2009): Used to support the widespread characterization that a non-exclusive patent license is “equivalent to a covenant not to sue.” The New Hampshire court borrows this concept to identify the core legal function of an IP license: forgoing infringement litigation.
  • Pro Done, Inc. v. Basham, 172 N.H. 138 (2019): Nokia relied on this case to argue that a covenant not to sue is a continuing obligation of forbearance. The court distinguishes it: Pro Done involved an agreement with an express promise “covenant[] not to sue,” whose breach itself supports a new cause of action. In contrast, the court treats a perpetual IP license that lacks an express “promise not to sue” as functioning like a discharge/release upon grant.
  • Stateline Steel Erectors v. Shields, 150 N.H. 332 (2003) and Moore v. Grau, 171 N.H. 190 (2018): Both are cited as consistent New Hampshire authority distinguishing a covenant not to sue (a promise of future forbearance, breachable) from a release (a defense extinguishing claims). They reinforce the interpretive principle that courts look to the agreement’s language and intent.

B. Legal Reasoning

The court’s reasoning proceeds in three steps:

  1. Identify the governing statute-of-frauds test. Under RSA 506:2 and cases like Proctor v. MacDonald and Spaulding v. Mayo, the question is not whether performance is likely to extend beyond a year, but whether the contract is incapable of full performance within one year.
  2. Define the operative “obligation” created by a perpetual IP license. The court treats an IP license, in functional terms, as permission to use an IP right—often analyzed as the licensor’s surrender of infringement claims (akin to a covenant not to sue).
  3. Distinguish “continuing forbearance” from “present discharge.” The key doctrinal move is the court’s conclusion that, where a perpetual license does not contain an express promise not to sue, it will be treated as “operat[ing] as a discharge just as does a release.” If the legal effect is discharge/release, the licensor’s performance is complete at the license’s effective date—making performance within one year possible.

The court rejects Nokia’s attempt to collapse the analysis into contract duration (“perpetual” must exceed one year). Duration is not the test; performance is. If the licensor’s only relevant performance is granting the license (and thereby relinquishing the right to sue), then that performance can occur immediately.

C. Impact

The decision is likely to have three concrete effects in New Hampshire commercial and IP litigation:

  • Narrows RSA 506:2 as a defense in oral IP-license disputes. Parties resisting enforcement of an oral “perpetual license” can no longer rely on the word “perpetual” alone; they must show the agreement imposed obligations that could not be performed within one year.
  • Elevates drafting and proof of “express” continuing obligations. The presence (or absence) of an express promise not to sue, support obligations, maintenance commitments, update duties, exclusivity management, or other ongoing covenants may determine whether the statute of frauds applies.
  • Reduces pressure to expand equitable exceptions. By answering Question 1 in a way that can keep many perpetual-license agreements outside RSA 506:2, the court avoided (for now) making broader pronouncements about part performance and promissory estoppel in the one-year context.

4. Complex Concepts Simplified

  • Statute of frauds (RSA 506:2): A rule that bars lawsuits to enforce certain oral agreements unless there is a signed writing. For the one-year category, the bar applies only if the contract cannot possibly be fully performed within one year.
  • “Performed within one year” test: Courts ask whether it is possible to finish what the contract requires within one year, not what the parties expected.
  • License as “covenant not to sue”: Many IP licenses are treated as the licensor agreeing not to sue the licensee for infringement within the license scope.
  • Covenant not to sue vs. release/discharge: A covenant not to sue is a promise about future conduct (if you sue later, you may breach). A release/discharge extinguishes the claim itself (if you sue later, the defendant has a defense because the claim is already discharged). This opinion treats a perpetual license without an express “promise not to sue” as closer to a release/discharge for statute-of-frauds purposes.
  • Certified questions: A federal court can ask a state supreme court to decide unsettled questions of state law. Here, the state court answered only the question necessary to resolve the determinative issue.

5. Conclusion

Collision Commc'ns v. Nokia Solutions and Networks OY establishes a clarifying rule for RSA 506:2: a perpetual intellectual property license does not, by virtue of being “perpetual,” fall within the one-year statute of frauds. Absent express language imposing continuing obligations—particularly an express promise not to sue—the licensor’s obligations are treated as performed upon grant, making performance within one year possible. The opinion therefore shifts the statute-of-frauds inquiry away from the label “perpetual” and toward the contract’s specific, provable obligations and language.