Negotiating A License Agreement

One of the fundamental principles of the negotiations is that negotiations should never be initiated unless they have the opportunity to escape with reasonably good alternatives. During the negotiation process, it is also necessary to develop its escape possibilities. Therefore, you should go to a non-ideal but accommodating licensee before finding the ideal licensee. The logic is that you can save a Walk-away option if you generate the interest of a secondary licensee who can be turned into leverage during negotiations with the ideal licensee. For example, if a licensee (z.B by a public relations announcement) learns that a potential licensee has just lost its license from a competitor and is desperately looking for a comparable brand to replace the lost brand, the licensee will be in a strong position in the negotiations. The licensee with a bad BATNA (and less advantageous alternatives) will be in a weak position. In this case, the licensee will probably accept at the end of the terms of agreement less favourable than if he had a stronger BATNA. With the preparation, you can improve your alternatives or perhaps make the alternative of the other part less attractive. The first step towards preparation is a good understanding of your BATNA. Learn more about it in my guide. Licensing agreements cover as many elements as the parties wish. To reach a “win-win” agreement, it must work for the benefit of both the licensee and the licensee, and their interests must not compete.

The decision on the payment structure (licence rate, time limits and incentives to maximize profits), the geographical area in which the taker can operate, the exclusivity of the taker, the rights to improve technology, etc., are among the many factors that are discussed. The desire to be flexible and find other solutions in a deadlock will be a long road to a satisfactory and profitable partnership for both parties. Dismissed (close) A party that obtains rights under a licensing agreement. The first legal documents that the licensee and the taker wish to present are confidentiality agreements and declarations of intent. Licensees must provide sufficient information about their technologies to interested parties. Given that licensees are legitimately concerned that their disclosures could be stolen from unethical licensees, it is understandable that they invite potential licensees to sign AND. However, licensees are often reluctant to sign AND, as they can already follow similar technologies. they do not want to rule out that another inventor will approach them in the future with a similar idea; and the idea could already be made available to the public. When large companies execute NDAs, these agreements are usually stripped of their power. In some cases, it may be more serious for a taker to sign an NDA, since non-disclosure may apply to the licensee, but not to the licensee.

The territory granted to the licensee under the licence must be explicitly identified. Keep the momentum you have on. Time is money! Having multiple companies on your product is never a problem. (Just because I think you can be eroded against others. This is not realistic, even if it happens.) The broader picture is that continuing contact with other potential licensees is a form of protection. If you have filed a provisional patent application, your patent status is a 12-month time bomb. So hurry up! Don`t get caught red-handed, even if they ask you for your intellectual property fairly quickly. If you have applied for a provisional patent, your answer is simple; Tell them that your concept is patented. At this point, you may want to see your application for a provisional patent, which is not a problem. However, you can ask them to sign a confidentiality agreement because you share confidential information with them. It is very likely that they will not sign their own and instead offer one of their own.

This entry was posted in Uncategorized by admin. Bookmark the permalink.