Home > Topics > Dealmaking and Marketing Technology to Product-Development Partners > Negotiating an Agreement: Skills, Tactics, and Best Practices > Editor's Summary, Implications and Best Practices

A licensing agreement establishes, in written form, the rules of an ongoing relationship whose success will depend on mutual trust. This chapter discusses tactics for successful licensing negotiations and emphasizes that negotiating an agreement should not be confrontational but rather should be seen as an opportunity to forge a long-lasting and mutually beneficial relationship. As this chapter makes abundantly clear, the best approach to negotiating an agreement is to offer initial terms that the public sector organization would be willing to agree to if it were on the other side of the negotiating table. Put differently, negotiating a fair licensing agreement should not be seen as a process of “bargaining.” Rather, a licensing agreement is establishing, in written form, the rules of operation for an ongoing relationship where mutual trust and confidence will be necessary for success.

For the most part, the public sector (with the exception of some universities and government offices) does not usually employ professional negotiators. The private sector is often frustrated by the general lack of negotiating ability that characterizes the public sector. This chapter describes best practices for negotiating licensing agreements. It identifies disciplines that are useful in negotiation:

• Business strategy or business development
• Marketing
• Law
• Science and medicine
• Production
• Finance

The chapter concludes with guidelines for how public-sector organizations can help ensure broad access to technological innovations though various licensing strategies.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• Negotiation skills are fundamental for successful licensing and technology transfer.
• The public sector needs to train its staff in negotiation skills if it is to take advantage of its R&D efforts.
• National policies reflect the fact that institutional development, partnership formation, and technology transfer is complex and interdisciplinary, requiring expertise in business, marketing, law, science, and finance, among others.

For Senior Management (university president, R&D manager, etc)

• The policies of institutions are critical in setting the tone that determine the outcome of licensing negotiations.
• Senior management should set that “tone” to ensure that deals made with others are a vehicle for building strong relations and trust between the parties.

For Scientists

• You will likely be asked to help negotiate licensing agreement that may impact your research program.

For Technology Transfer Officers

• Your role in negotiating agreements is central. You ought to coordinate the assembly, training, and organization of the negotiating team.
• The best approach for a public sector organization negotiating an agreement with a private sector entity is usually to offer initial terms that the organization would be willing to agree to if it were on the other side of the table. Negotiating a fair licensing agreement should not be seen as a process of “bargaining.” Rather, a licensing agreement is establishing, in written form, the rules of operation for an ongoing relationship where mutual trust and confidence will be necessary for success.