NEGOCIATION

NEGOCIATION

1. Preparing to negotiate

   • with effective preparation
   • defining guidelines for the process
   • includes assembling the right team
   • an understanding of what they want from the deal
   • CLASSIFICATION
     • TEAM will conduct due diligence and negotiate the license
       • include a Business Development Executive;
         • a Scientific/Technical Expert; a Decision Maker; and a Licensing Attorney. The scientific and legal
     • INITTIAL TEAM MEETING
       • It is important that the deal team meet and reach an understanding of the business motivation for the deal
         • team should identify, assess and prioritize the interests of their client.
           • The deal team should assess its own and the other party’s position
             • 1) reviewing the strength and breadth of patent protection
             • 2)conducting a right-to-use study on potential commercial products
             • 3) reviewing the developmental stage of the patented technology
     • TERM SHEET helpful for parties to exchange a term sheet prior to the initial negotiation meeting
       • 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
     • DEADLINES
       • it forces the other party to reveal its true intentions and interests in the licensing agreement
         • Major steps in the negotiation process for which preset deadlines may be set include:
           • the initial meeting, drafting the letter of understanding, executing the letter of understanding
     • The groundwork for open dialog.
       • a nondisclosure agreement can provide security for both parties to maximize information transfer
     • Drafting the contract.
       • he party drafting the contract is always in the more favorable position
         • The drafting party may be the licensor or the licensee

2. Negotiating IP licensing agreements and developing the terms of the business transaction involve evaluating numerous factors pertaining to the specific circumstances of the parties and the technology at issue

3. NEGOCIATION

   • Valuation approaches.
     • uses one of three methods: the cost method, the market method, and the income method. The value of the technology using the cost
   • Proprietary position
     • A weak proprietary interest may exist where a patent is questionable in nature
       • is the existence, or lack of existence, of third party patents that cover all or part of the technology of interest.
   • Developmental stage of invention.
     • commercially viable product is produced.
       • Patented inventions that are in the early
   • Exclusivity and field of use
     • License exclusivity refers to whether the licensor has licensed the invention/technology to multiple licensees, whereas the field of use
       • It is more advantageous for licensors to grant multiple non-exclusive licenses to further the goal of fully developing the patented technology.
   • Payment terms.
     • There are several forms of payment that licensing parties can negotiate to compensate the licensor for the patented technology.
       • 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