Negotiation and Licensing

Negotiation and Licensing

1. The purpose of any license negotiation is that both parties clearly identify what each one wants from the trade agreement they intend to conclude.

   • The Team
     • It is not advisable to negotiate on your own, it is convenient to designate a group, at least two people, that are able to address all issues, such as: Technology, manufacturing, intellectual property, in turn rely on the board of directors. In the end being convinced that the agreement is right for the organization.
   • NEGOTIATING
     • This process normally takes more than one meeting, in which technology is discussed, once an agreement is reached, it is done formally, and in this phase, more staff with experience in technical and legal knowledge, meet at the firm of the agreement.
   • The Terms
     • Contain
       • Licence Fee
         • Also call
           • ‘Lump sum’, ‘down payment’ or ‘upfront fee’
             • Is
               • It is a payment that is usually separate from royalty payments
                 • And
                   • The basis for payment can be any, or a combination like this
                     • A once-off non-refundable fee , a number of fees paid upon reaching the agreed milestones, a fee paid when signing the license agreement, cost of patents to date (or a percentage of them) or cost of research to date (or a percentage of this), a lump sum to cover the negotiation and drafting costs of the agreement.
         • It has some considerations
           • Payment as a security, recognition of acces to strong IP, recognition on the part of de licensee, a payment towards a portion, milestone fees
       • Royalties
         • Are
           • Paid in addition to the license fee
       • Setting the royalty rate
       • It is given by the
         • End use or application of the product or technology
           • It is important to consider
             • For independent products or processes, For composite products or processes, Set the royalty as a precise amount of cash per unit / volume / peso sold, If the licensee is making an investment,
       • Minimun royalty
         • Is when
           • The licensor must have an expected annual sales expectation
       • Reset minimum royalties

2. HEADS OF AGREEMENT

   • Are
     • A set of bullet headings, under which the parties are expected to discuss and complete in their own words
       • Contains
         • Heads of Agreement - License