17817926
Description
Mind Map by Oscar Camilo Rodriguez, updated more than 1 year ago
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Created by Oscar Camilo Rodriguez
about 5 years ago
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NEGOTIATIONS AND LICENSING
- THE TEAM
- It is unwise to negotiate on your own, as points and issues may
arise that you are either unsure of or misinterpret. It is best to
appoint a small team, which can be as few as two people, to
address points on technology, manufacturing, legal, IP and finance,
as required. Identify the colleagues, and any consultants, you think
should be involved in the negotiations and work out a clear role for
each in the discussions.
- It is unwise to negotiate on your own, as points and issues may
arise that you are either unsure of or misinterpret. It is best to
appoint a small team, which can be as few as two people, to
address points on technology, manufacturing, legal, IP and finance,
as required. Identify the colleagues, and any consultants, you think
should be involved in the negotiations and work out a clear role for
each in the discussions.
- NEGOTIATING
- The process of negotiation is frequently
informal and, typically.
- The process begins with discussion on the main points
that must be agreed and usually extends over a period
of time, taking the form of conference calls and e-mail
exchange of documents. It concludes with the
introduction of a draft agreement, when the main
points have been agreed. The parties may need to
meet in person at some point in between, if
discussions become too complex to resolve certain
issues on the phone. Finally, the draft document is
agreed and exchanged for signature by both parties.
- The contract must fulfil three essential
elements. There must be
- Terms of exchange
specified for the bargain
- Something of value exchanged
- Mutual exchange
- Terms of exchange
specified for the bargain
- The contract must fulfil three essential
elements. There must be
- The process begins with discussion on the main points
that must be agreed and usually extends over a period
of time, taking the form of conference calls and e-mail
exchange of documents. It concludes with the
introduction of a draft agreement, when the main
points have been agreed. The parties may need to
meet in person at some point in between, if
discussions become too complex to resolve certain
issues on the phone. Finally, the draft document is
agreed and exchanged for signature by both parties.
- The process of negotiation is frequently
informal and, typically.
- THE
TERMS
- Licence
Fee
- The licence fee (also referred to as
‘lump sum’, ‘down payment’ or
‘upfront fee’) is a payment that,
typically, is separate to royalty
payments. For a proven technology
or product, which is already in
commercial operation and is being
transferred as a turn-key
technology package to the licensee,
the licence fee is usually a set fee
which all licensees pay.
- The licence fee (also referred to as
‘lump sum’, ‘down payment’ or
‘upfront fee’) is a payment that,
typically, is separate to royalty
payments. For a proven technology
or product, which is already in
commercial operation and is being
transferred as a turn-key
technology package to the licensee,
the licence fee is usually a set fee
which all licensees pay.
- Royalties
- Normally, royalties are
paid in addition to the
licence fee. They are
based usually on a unit, a
volume or a weight of
sale – the ‘royalty base’
- Setting the Royalty Rate
- In setting the royalty,
consideration must be given to
the end-use or application of
the product or technology. A
stand-alone product or
process based completely on
the licensed technology is
more straightforward than a
case where the technology is
only part of a whole
- In setting the royalty,
consideration must be given to
the end-use or application of
the product or technology. A
stand-alone product or
process based completely on
the licensed technology is
more straightforward than a
case where the technology is
only part of a whole
- Resetting Minimum Royalties
- In the event that the minimum
royalty is not achieved,
partners usually build some
scope into the licence
agreement for renegotiation of
the minimum royalty on
reasonable terms, but
cancellation of the licence is an
option, or reverting to a
non-exclusive licence where an
exclusive licence exists.
- In the event that the minimum
royalty is not achieved,
partners usually build some
scope into the licence
agreement for renegotiation of
the minimum royalty on
reasonable terms, but
cancellation of the licence is an
option, or reverting to a
non-exclusive licence where an
exclusive licence exists.
- Minimum
Royalty
- The licensor should have an
expectation of achievable
annual sales. A minimum
royalty can be based on this
market forecast. The
minimum royalty also
ensures that the licensee
actively exploits the licence
and does not use it as a
blocking manoeuvre towards
competitors
- The licensor should have an
expectation of achievable
annual sales. A minimum
royalty can be based on this
market forecast. The
minimum royalty also
ensures that the licensee
actively exploits the licence
and does not use it as a
blocking manoeuvre towards
competitors
- Setting the Royalty Rate
- Normally, royalties are
paid in addition to the
licence fee. They are
based usually on a unit, a
volume or a weight of
sale – the ‘royalty base’
- Licence
Fee
- HEADS OF AGREEMENT
- Before any exchange of agreement templates
begins, it is essential that a ‘Heads of Agreement’ is
discussed and that agreement is reached on each
of the important aspects of the planned interaction
- Heads of Agreement – Licence
- Parties, Start date, Duration, Nature of licensed IP (patent,
copyright, know-how, etc.), Work schedule, Costs, Lump
sum/royalties (minimum royalties), Payment schedule, Licence
option, Option term on licence, Right of first refusal, Scope of
licence, Exclusivity. Liability, Warranty on licensed patents,
Ownership of IP, Ownership of improvements, Infringement (who
takes action to sue), Termination, Choice of law, Dispute
resolution.
- Parties, Start date, Duration, Nature of licensed IP (patent,
copyright, know-how, etc.), Work schedule, Costs, Lump
sum/royalties (minimum royalties), Payment schedule, Licence
option, Option term on licence, Right of first refusal, Scope of
licence, Exclusivity. Liability, Warranty on licensed patents,
Ownership of IP, Ownership of improvements, Infringement (who
takes action to sue), Termination, Choice of law, Dispute
resolution.
- Heads of Agreement – Licence
- Before any exchange of agreement templates
begins, it is essential that a ‘Heads of Agreement’ is
discussed and that agreement is reached on each
of the important aspects of the planned interaction
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