sell side fairly thin, page-39

Hi abdm,

Another informative post worth reading, the link that you provided at the end of the post clearly shows a company in control of its destiny, but more importantly looking outside the square. There was an interesting link to a page that discusses “Licencing Intellectual Property” that I thought was worth reading and posting as a general guide -

Licensing intellectual property opens up a whole new world of customers which results in more sales thus resulting in more money to fuel future innovations. It is not only important to get your innovations into new places but you need to be able to capture value on your innovations thus earning for all of your hard work. So how exactly do you guarantee this? Below are ten tips that you can follow to license your intellectual property.

You need to keep good Records by making sure that centralized agreement files are established and maintained so that if there is ever a license dispute, you will have the upper hand advantage with better agreement files. Having good agreement files will also make it much easier for you to sell your innovation to potential Buyers

You need to enforce diligence from the start. Obtaining and enforcing a Patent is more than just the idea of easy money. There is a lot of work involved in this process. You might have obtained a patent for your innovation but there might be others who are using it. You need to be on the lookout for these copycats. Look for your new product or idea in theirs.

You need to keep long term relationships. Licensing intellectual property results in a long term relationship which needs sufficient good will and understanding.
You need to test the quality of your innovation before licensing it so that you can maintain that quality after licensing. Ongoing support after the development of new products and services are very important. When you produce a new development, you just do not walk away from it.

You assume that the license is negotiable. Negotiations is a part of any licensing process. If you do not agree to something in the agreement, you have the right to say something about it or to make a better suggestion. This can either have two results – a change or an explanation for keeping it as it is.

Be careful with Exclusivity. Most companies will seek exclusivity from most startups or companies with new developments. Do not be too hasty to grant exclusivity. Instead build milestones or metrics based on performance. Since that you are just in the starting phase of your new development, you might not know its full potentials so you should in no way grant exclusivity. Exclusivity should only be granted once there is contention.

You should define as well as prioritize deal Parameters and boundaries such as transferring technologies, royalties, copyrights, assigning and licensing patents. Once you have defined and understood your parameters, you can assign a value to them. However when pricing intellectual property, you should take into consideration how the licensor can execute a strategy.

You should be flexible on prices and be able to negotiate on prices. Be open for different payment types such as lump sum payments or milestone payments.

You should recognize different agendas. You need to know the cultural of the company you are working with and decide if you are able to accept or deal with it.

Finally, you need to be informed of what could happen with the license. For example, your license can be acquired by a larger company in the future. You should also make sure that in cases of Bankruptcy, that the license is automatically terminated to prevent it from being sold with other assets to new buyers who will then obtain ownership of the license



As always please D Y O R