NEGOTIATIONS AND LICENNSING

NEGOTIATIONS AND LICENNSING

1. To identify the potential agreement in the negotiation, it is important that each party is satisfied with the final agreement reached the objective is to create trust and justice by reaching expectations during the terms and transaction as agreed.

2. THE TEAM

   • It is vitally important to create a team that is capable of evaluating the terms in the negotiations
   • technology, manufacturing, legal, intellectual property and finance consultants
   • Define roles that lead and contribute to the audit process and be convinced that the agreement is appropriate for your organization

3. NEGOTIATING

   • In the negotiation it is important to define the introduction of the project that is being discussed.
   • Create a logbook or draft document that certifies the agreements that are being agreed
   • They introduce specific individuals of the team with a technical and legal experience on both sides to complete the agreement and sign a formal agreement
   • Negotiations should focus on one element at a time so that each proposal by both parties have the opportunity to exchange articles to reach solutions and create friendly terms
     • the negotiations when establishing values that allow to create guarantees in their processes or an insurance where it allows to strengthen the parts of the holder and licensor
     • for a contract to be viable it must contain three important factors
     • Exchange terms specified for the business
     • Something of value exchanged
     • Mutual exchange.

4. THE TERMS

   • Negotiations are agreed licensing fees are payments or royalties for products or services is a commercial operation is a fixed license fee paid by all licensees
   • the license fee is intended to reflect a number of considerations
     • -Payment as guarantee or sign of intention that the licensee undertakes to market the technology
     • -Recognition of access to a strong IP that provides the monopoly with a unique tangible business opportunity for the licensee
     • -Significant investment in technological development, where the investment risk is a payment for a part of the expenses already committed by the licensor
     • -Risk of paying a higher license fee in exchange for a better long-term gain when paying a reduced royalty rate.

5. ROYALTIES

   • The royalties are appreciations of operating costs and their rate is similar to that of the license units, the payment units or values are by volume or a sales weight.
   • ROYALTY RATE
     • must be based on the use or application of the end of the product or technology
       • INDEPENDENT products or processes, base the royalty on the sale price of the product, a unit weight or a unit volume
         • -Realía as a precise amount of cash per unit / volume / peso sold implies an inflation license risk
       • COMPOSITE products or processes, base the royalty on the percentage contribution of the licensed technology to the total manufacturing cost of the final product
         • -were a percentage of the premium obtained by the manufacturer, compared to the equivalent product without the licensed technology
     • MINIMUM ROYALTY it is possible if you keep for several reasons
       • Expectative annual sales attainable.
       • -market forecast
       • - actively exploit the license
       • -Pre-marketing stage when appropriate and in good demand
     • MINIMUM ROYALTIES may not be achieved for several reasons
       • -The product or technology is completely new and both the licensor and licensee had unrealistic market expectations
       • -The licensee is too small or specialised and cannot service the targeted markets
       • -The product or technology shows problems
       • -The licensee does not use his best efforts to promote the product or technology.
       • The renegotiation of a minimum royalty is determined by the agreements of the partners and reasonable terms, with the option of canceling the license and negotiating terms of a new license

6. HEADS OF AGREEMENT

   • The heads of the negotiation will discuss the most important points determining the scope, attaching the data provided the planned interaction, research, exploitation of patents and key indicators in the agreement