PREPARING TO NEGOTIATE

PREPARING TO NEGOTIATE

1. 1. THE TEAM

   • The deal team will conduct due diligence and negotiate the license.

2. 2. INITIAL TEAM MEETING

   • 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

3. 3. THE TERM SHEET

   • 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.

4. 4. DEADLINES

   • It forces the other party to reveal its true intentions and interests in the licensing agreement. Parties not committed to reaching an agreement will not meet deadline requirements, enabling the other party to cut its losses and look elsewhere for a potential licensing partner.

5. 5. THE GROUNDWOR 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.

6. 6. DRAFTING THE CONTRACT

   • 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.