"Include a valid copyright notice on Licensee's software product" means that your own software must include a copyright notice. In other words, you don't release your software as public domain or uncopyrighted. This doesn't mean you have to register the copyright, but simply include a copyright notice on your product. For example, if your company name is "Mysoft Inc." then include "Copyright 2009 Mysoft Inc." somewhere on your intro screen or about box or installer. If you don't have a company, then you might use your name: "Copyright 2009 Cesar".
VP, R&D, Xceed