THE PROCESS OF NEGOTIATING

THE PROCESS OF NEGOTIATING

1. main aspects

   • Alternatives: solutions for the achievement of interests outside the negotiation
   • Interests: what the parties are really looking for
   • Options: the full range of possibilities that the parties have to reach an agreement
   • Legitimacy: been reached when the parties consider that the arguments are fair
   • Commitments: verbal or written statements that specify what a party will do or will not do
   • Communication: the art and science of listening and speaking effectively

2. The negotiation process involves four distinct phases: preparing, discussing, proposing and bargaining.

   • The Preparation Phase
     • This is probably the most important, in that it is almost impossible to recover from, or overcome, inadequate preparation.
   • The discussing Phase
     • This is usually characterized by the licensor promoting the merits and the opportunity offered by its technology, and the potential licensee reviewing documentation and information under a confidentiality agreement.
   • The Proposing Phase
     • In the proposing phase, the parties are exploring the possible relationship and the principal commercial terms. "Why should we rant you an exclusive worldwide license?" Key questions are being asked, assumptions tested, strategic objectives established and boundaries identified.
   • the bargaining phase
     • the question might become, "If we grant you an exclusive worldwide license, then you have to double the sum payable on signing the agreement", to which the licensee might respond "If we double the dovvn-payment, then one half is to be credited against the future royalties payable to you on our sales of Licensed Products."

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