How to Prepare and Negotiate Technology License Agreements
The whole purpose of inventing a technology is to get as many people as possible to use it. That is the only way one can generate money out of it. However, the challenge usually comes in getting an investor for your technology. One often gets turned down by some potential clients and even those that show interest will never get into a licensing agreement that you deserve. As such, it is quite essential to know how to prepare and negotiate technology licensing agreements effectively. www.pandapatent.com , one of the best companies dealing with matters pertaining licensing, patents and technology, provides some tips to help you prepare and negotiate the best deal for your technology.
Don’t begin negotiating at the table
Commencing negotiations at the negotiating table could mean that you lose leverage. The first thing is to ensure that you have a product that meets your target value. Then generate a buzz for your technology through publication or speaking at conferences. When you see that it is the investors approaching you and not you making a lot of effort to find target investors, then you know that your product is ripe for the market. The moment you have a product that is not well developed, finding an investor will be awkward. Therefore, ensure you hold all the crucial cards before you hit the negotiating table.
Approach the potential investor strategically
It is always advantageous to have an intermediary who will approach the investors on your behalf. Contacting your potential investor directly, also, makes you lose leverage. The intermediary should be someone who is knowledgeable of how to handle licensing agreements. It is the point where you can engage an attorney who specializes in negotiating licenses. If your technology offers some good value when applied, then the intermediary, with their experience, should be able to negotiate a good deal for you with the investors.
Ensure you have reasonably good alternatives
Before you walk into a licensing negotiation, ensure that you have other reasonable options. Even while negotiating, continue developing your “walk away” options. Begin negotiating with the least typical investor who is accommodative and pick one or two arsenals they will use in their negotiations before you head to an ideal licensee. It gives you an advantage since you can walk away to the next investor with new negotiating angle while generating the interest of a secondary licensee. Also, their attention can be used as leverage when negotiating with the ideal licensee.
However, you need to be smart with your bluffing since the large companies have a higher chance of rejecting a technology rather than licensing it.
Have goals and objectives
Do not go into a negotiation if you do not have objectives and goals to achieve. You and your attorney should be reading from the same script. Entering into any form of talks without goals in mind makes you gullible and easy to lure into accepting what the investors will offer, even if it doesn’t provide the kind of value your technology is worth. As such, you should know the limits regarding the financial offers and time. Often, the longer the negotiations take, the less likely that a deal will be struck. As such, ensure that you are well organized and always look to attain the goals and objectives set.
General negotiating techniques
The way to negotiate is to focus on the lucrative long-term relationship that will be as a result of the negotiations and not just to get a signature on the license agreement. The best practices that negotiators should adhere to are:
• Create value first before you allocate value. It will be achieved when making your initial presentation of the technology. You should be able to put a good number of issues on the table and show that your technology can satisfy them.
• Be very soft with the people you are negotiating with but hard on the problems. Be very aggressive with your arguments on how the technology is going to be beneficial. Your argument should eliminate any form of doubt that the investors may have. Being soft on the people means that you are courteous and professional in the manner you speak. These are people you will be working within future, and hence you must demonstrate that you can reason and professionally engage with them.
• Have deadlines for getting various issues out of the table. A party that shows no commitment to observing deadlines cannot commit to striking a deal. As stated earlier, the longer the negotiations take, the less likely for an agreement to be reached.
• Have reasonable expectations and acknowledge the fact that you will never get a perfect deal. No licensee will offer you all the favorable terms that you want. Besides, the chances are that some other innovators are looking to license their technologies with them.
When going to negotiate for a licensing deal, ensure that you have a product that offers value, be organized and have goals and objectives to achieve within given timeframes.