NEGOTIATIONS AND LICENSING

NEGOTIATIONS AND LICENSING

1. PURPOSE: Both sides to identify clearly what each wants from the commercial arrangement they intend entering into

2. OBJECTIVES

   • Where each side is clear on what it is giving and receiving from the agreement
   • Each party is content with the final deal reached and has gained a sense of trust and fairness from the other

3. TEAM: appoint a small team, which can be as few as two people, to address points on technology, manufacturing, legal, IP and finance, as required

4. NEGOTIATING

   • Frequently informal
   • Is not completed in a single meeting
   • Should focus on the Heads of Agreement
   • Essential elements of a contract
     • Terms of exchange specified for the bargain
     • Something of value exchanged
     • Mutual exchange

5. TERMS

   • Licence free: payment that, typically, is separate to royalty payments
   • Royalties: They are based usually on a unit, a volume or a weight of sale
     • Setting the Royalty Rate
     • Minimum Royalty
     • Resetting Minimum Royalties