15514927
Description
Mind Map by Laura Andrea Medina Rangel, updated more than 1 year ago
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Created by Laura Andrea Medina Rangel
over 5 years ago
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Preparing to negotiate
- A key to any deal is for each party to have an
understanding of what they want from the deal. Thus,
effective negotiation begins with effective preparation.
Effective preparation includes assembling the right
team, preparing a heads of agreement, defining
guidelines for the process, negotiating honestly, and
drafting the contract.
- The
Team
- It will be formed by a
Business Development
Executive; a scientific /
technical expert; a
decision maker; and a
license lawyer.
Scientific and legal roles
can be filled by multiple
team members. The
business development
executive is often the
leader of the team and
is responsible for
keeping the negotiation
process moving and for
ensuring that other
team members comply
with the assigned
tasks.
- It will be formed by a
Business Development
Executive; a scientific /
technical expert; a
decision maker; and a
license lawyer.
Scientific and legal roles
can be filled by multiple
team members. The
business development
executive is often the
leader of the team and
is responsible for
keeping the negotiation
process moving and for
ensuring that other
team members comply
with the assigned
tasks.
- Initial Team
Meeting
- It is important that the deal
team meet and reach an
understanding of the
business motivation for the
deal and the responsibilities
and role of each team
member during the process
- It is important that the deal
team meet and reach an
understanding of the
business motivation for the
deal and the responsibilities
and role of each team
member during the process
- The Term Sheet
- is helpful for parties to exchange
a term sheet prior to the initial
negotiation meeting. The term
sheet typically covers the major
issues in a potential deal in
outline form, including: the
licensed product or process;
licensed territory; license fee and
royalty; technical information and
training required to develop and
manufacture, sell and service the
licensed product, and who will be
responsible for same; sales and
service support; degree of
exclusivity, and duration of the
license.
- is helpful for parties to exchange
a term sheet prior to the initial
negotiation meeting. The term
sheet typically covers the major
issues in a potential deal in
outline form, including: the
licensed product or process;
licensed territory; license fee and
royalty; technical information and
training required to develop and
manufacture, sell and service the
licensed product, and who will be
responsible for same; sales and
service support; degree of
exclusivity, and duration of the
license.
- Deadlines
- Establishing preset
deadlines for each of the
major steps in the
negotiation process is
important because it forces
the other party to reveal its
true intentions and
interests in the licensing
agreement.
- Establishing preset
deadlines for each of the
major steps in the
negotiation process is
important because it forces
the other party to reveal its
true intentions and
interests in the licensing
agreement.
- The
groundwork for
open dialog
- In any negotiation, a
nondisclosure agreement can
provide security for both
parties to maximize
information transfer. Some key
terms include license and
scope, enforcement rights, the
financial arrangement,
additional patent prosecution
and maintenance costs,
ownership of improvements,
liability, indemnification, and
warranties and
representations.
- In any negotiation, a
nondisclosure agreement can
provide security for both
parties to maximize
information transfer. Some key
terms include license and
scope, enforcement rights, the
financial arrangement,
additional patent prosecution
and maintenance costs,
ownership of improvements,
liability, indemnification, and
warranties and
representations.
- Drafting the
contract
- Commentators have
suggested that the party
drafting the contract is
always in the more
favorable position because
that party will be in a
position to ensure inclusion
of desirable provisions and
places the other party in
the position of defending
every request to modify the
drafted agreement.
- Commentators have
suggested that the party
drafting the contract is
always in the more
favorable position because
that party will be in a
position to ensure inclusion
of desirable provisions and
places the other party in
the position of defending
every request to modify the
drafted agreement.
- The negotiation
- The terms of a licensing contract reflect
the allocation of risk between the parties
of the potential future development and
marketability of the patented technology.
A licensor that has taken a molecule
through one or more phases of a clinical
trial, or has the financial resources to do
so, will likely be in position to negotiate
narrow licensing agreements that
incentivize development and marketing
of the technology and that enable
additional licensing agreements with
other licensees of different strengths that
can compete in other markets. A licensor
without these resources, financial or
otherwise, will often be in a weaker
bargaining position.
- The terms of a licensing contract reflect
the allocation of risk between the parties
of the potential future development and
marketability of the patented technology.
A licensor that has taken a molecule
through one or more phases of a clinical
trial, or has the financial resources to do
so, will likely be in position to negotiate
narrow licensing agreements that
incentivize development and marketing
of the technology and that enable
additional licensing agreements with
other licensees of different strengths that
can compete in other markets. A licensor
without these resources, financial or
otherwise, will often be in a weaker
bargaining position.
- Valuation
approaches
- A business school/MBA
approach to valuation
often uses one of three
methods: the cost
method, the market
method, and the income
method.
- A business school/MBA
approach to valuation
often uses one of three
methods: the cost
method, the market
method, and the income
method.
- Proprietary position
- A weak proprietary interest
may exist where a patent is
questionable in nature; one
that covers only a very
narrow technology, is very
similar to other patented
technology or was granted
despite potentially not
meeting the requirements for
patentability. Such a patent
does not offer significant
market strength because it is
either incapable of keeping
products or services using
similar technology off the
market or potentially could be
invalidated
- A weak proprietary interest
may exist where a patent is
questionable in nature; one
that covers only a very
narrow technology, is very
similar to other patented
technology or was granted
despite potentially not
meeting the requirements for
patentability. Such a patent
does not offer significant
market strength because it is
either incapable of keeping
products or services using
similar technology off the
market or potentially could be
invalidated
- Developmental
stage of
invention
- of invention. Patented
inventions that are in the
early stage of
development often require
substantial investment
and development before a
commercially viable
product is produced.
- of invention. Patented
inventions that are in the
early stage of
development often require
substantial investment
and development before a
commercially viable
product is produced.
- Exclusivity and
field of use
- refers to whether the
licensor has licensed the
invention/technology to
multiple licensees,
whereas the field of use
is the circumstances for
which the licensor has
granted the licensee
permission to make, use
and sell the patented
technology.
- refers to whether the
licensor has licensed the
invention/technology to
multiple licensees,
whereas the field of use
is the circumstances for
which the licensor has
granted the licensee
permission to make, use
and sell the patented
technology.
- Payment
terms
- There are several forms of
payment that licensing
parties can negotiate to
compensate the licensor for
the patented technology. For
example, when a University
is the licensor, a typical
license will include a signing
fee, reimbursement and
ongoing payment of patent
prosecution costs, milestone
payments, minimum annual
royalties and a percentage
royalty on sales.
- There are several forms of
payment that licensing
parties can negotiate to
compensate the licensor for
the patented technology. For
example, when a University
is the licensor, a typical
license will include a signing
fee, reimbursement and
ongoing payment of patent
prosecution costs, milestone
payments, minimum annual
royalties and a percentage
royalty on sales.
- Rights to
improvements
- Parties should negotiate
provisions to address the
ownership of any current or
future improvements of the
technology. A licensee will
want the right to use any
variation of the technology
claimed in the patent and
developed by it or the
licensor after the license
agreement is entered into so
that it does not need to
renegotiate a license if the
uses become desirable to it.
Where improvements are
developed by the licensee
after the signing of the
agreement, the parties will
need to negotiate who will
own the rights to the
improvements.
- Parties should negotiate
provisions to address the
ownership of any current or
future improvements of the
technology. A licensee will
want the right to use any
variation of the technology
claimed in the patent and
developed by it or the
licensor after the license
agreement is entered into so
that it does not need to
renegotiate a license if the
uses become desirable to it.
Where improvements are
developed by the licensee
after the signing of the
agreement, the parties will
need to negotiate who will
own the rights to the
improvements.
- The
Team
- LAURA ANDREA MEDINA RANGEL
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