20270387
Description
Mind Map by sd herreraga, updated more than 1 year ago
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Created by sd herreraga
over 4 years ago
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NEGOTIATIONS AND LICENSING
- By sandra herrera galvis
- The purpose of any licensing
negotiations is for both sides to
identify clearly what each wants
from the commercial
arrangement they intend
entering into.
- The objective is to achieve
an outcome, where each
side is clear on what it is
giving and receiving from
the agreement and,
importantly, that each
party is content with the
final deal reached and has
gained a sense of trust and
fairness from the other.
- The team
- the person leading the team must
understand the corporate issues and
the limits beyond which he cannot
negotiate.
- 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.
- the person leading the team must
understand the corporate issues and
the limits beyond which he cannot
negotiate.
- NEGOTIATING
- 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 negotiations should focus
on the Heads of Agreement
presented for the initial
discussion
- The contract must fulfil
three essential elements.
There must be:
- THE
TERMS
- Licence Fee
- is intended to reflect
a number of
considerations:
- Payment as a
security or sign of
intention
- Recognition of
access to strong IP
- Recognition on the
part of the licensee
- A payment towards a portion
of the expenditures already
committed by the licensor;
- Milestone fees to reward the
licensor for the successful
development of the technology
- Payment as a
security or sign of
intention
- is intended to reflect
a number of
considerations:
- Royalties
- This necessitates an appreciation
of the operating costs, the likely
sales price and the net margin for
the product from the technology
being licensed.
- Setting the Royalty Rate
- consideration must be
given to the end-use or
application of the
product or technology
- The following are some
approaches worth
considering:
- For stand-alone products or processes,
base the royalty on the sales price of the
product, a unit weight, or a unit volume;
- For compound products or processes, base
the royalty on the percentage contribution
of the licensed technology to the total
manufacturing cost of the final product
- For compound products or processes,
base the royalty on a percentage of the
premium achieved by the manufacturer
- ensure that the royalty is
index-linked;
- For stand-alone products or processes,
base the royalty on the sales price of the
product, a unit weight, or a unit volume;
- consideration must be
given to the end-use or
application of the
product or technology
- Minimum Royalty
- may be appropriate in a situation where
the technology is at the pre-market stage
and there is a good demand for it from
several competitors.
- pre
marketing
stage
- marketing
forecast
- pre
marketing
stage
- may be appropriate in a situation where
the technology is at the pre-market stage
and there is a good demand for it from
several competitors.
- Resetting Minimum
Royalties
- The to discusses
some approaches
to negotiating
commercial
agreement for
renegotiation of
the minimum
royalty on
reasonable terms
- The to discusses
some approaches
to negotiating
commercial
agreement for
renegotiation of
the minimum
royalty on
reasonable terms
- This necessitates an appreciation
of the operating costs, the likely
sales price and the net margin for
the product from the technology
being licensed.
- Licence Fee
- HEADS OF AGREEMENT
- discussed and that agreement is reached
on each of the important aspects of the
planned interaction, be it a research
collaboration, a licence agreement, a
licence option agreement, patent
exploitation agreement, or other.
- Heads of Agreement – Licence
- Parties: The registered legal name and location of the parties.
- Start date: Commencement of licence
- Duration: Agree the appropriate term for the licence
- Nature of licensed IP (patent, copyright, know-how, etc.): Provide only those
patents that cover the specific product which the licensee wants access
- Work schedule: Where work needs to be done, in transferring the
technology from the licensor to the licensee
- Costs: Who will incur the costs of a) the technology transfer and b) the
development work
- Lump sum/royalties (minimum royalties): Negotiate the licence fee and
royalty rate as discussed in the section above.
- Payment schedule: Depending on the payments that have been agreed, also
agree when the appropriate payments should be made
- Licence option:If the agreement includes a licence option,
specify whether exclusive or non-exclusive
- Option term on licence: In the case of a licence option, agree the term to allow
time for the licensee to do due diligence on the patent applications
- Right of first refusal:I f the first party rejects the offer, then he can
accept the second offer and grant a license to the second party
- Scope of licence: The licence should be made as
specific as possible by using several
- Exclusivity: Exclusivity can be granted without giving away exclusive
rights to the whole IP
- Liability: The licensee provides product liability for any products it manufactures
under the licence and indemnifies the licensor against any damages.
- Warranty on licensed patents: The licensor is expected to provide certain
warranties on the patents to which the licensee has certain rights
- Parties: The registered legal name and location of the parties.
- discussed and that agreement is reached
on each of the important aspects of the
planned interaction, be it a research
collaboration, a licence agreement, a
licence option agreement, patent
exploitation agreement, or other.
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