Your source for expert commentary on IP management issues.
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Editor-in-Chief, Anatole Krattiger
Why This Topic Is Important
The licensing contract and relationship is the most common channel through which both technologies and
the rights to develop and sell products are transferred between entities. This section provides detailed
explanations of both the strategies and the mechanics of successful licensing.
Key Implications and Best Practices: Section 11
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.
- Besides reflecting the business deal that has been made, few components are more important in a license than clear and unambiguous definitions.
- For practical purposes, any organization engaged in high-volume licensing will find it useful to develop its own internal template agreements that are then modified and adapted to suit each special circumstance. checklists for different types of recurring licensing negotiations should be reviewed prior to and during negotiations.
- Recognize that relationships—like markets—are not static. Any provision in an agreement must, of course, be adhered to, but the practice of including sufficient flexibility in licensing agreements can be a valuable strategy in forging strong partnerships.
- The granting of options (rights of first refusal, pipeline agreements, and so forth) can be a rather controversial aspect for public sector licensing. But options can be tremendously powerful in forging strong and lasting relationships and in optimizing your institution’s economic returns and humanitarian effects.
- Field-of-use licensing should be adopted as the preferred method of licensing whenever possible. It allows you to gain greater control while maximizing the use and value of your licensed technology. But be flexible and study the licensee’s motivations and business model carefully as a way of conferring the highest possible incentives. Always strive to retain control over patent prosecution and infringement actions when adopting a field-of-use licensing strategy.
- Familiarize yourself with the various ways to deal with royalty stacking and royalty packing issues as a way of balancing risks and returns. The choice will depend on how far downstream into product development your institution stays involved.
- Negotiating about low-probability events can sidetrack progress toward agreement on core issues, so care should be taken during the negotiation to attend to issues in a manner commensurate with their strategic importance. It is often best to focus on the overall deal before entering into discussions about specifics.
- In a license agreement, the rights to sublicense and assign a license ought to be explicitly articulated.
- In research collaborations, in which employees of two or more entities share ideas and information, confidentiality provisions are important. Make sure the scientists in your institution understand these obligations and rights.
- Licensee agreements are contracts. Hence, a practical understanding of contract law will be fundamental to negotiating and drafting good license agreements. Many smaller TTOs use outside counsel to ensure that agreements are compliant with national law.
A Checklist for Negotiating License Agreements
by Donna Bobrowicz
Commercialization Agreements: Practical Guidelines in Dealing with Options
by Mark Anderson, Simon Keevey-Kothari
by Sandra L. Shotwell
The In- and Out-Licensing of Plant Varieties
by Malin Nilsson
In-Licensing Strategies by Public-Sector Institutions in Developing Countries
by Kanikaram Satyanarayana
Licensing Agreements in Agricultural Biotechnology
by Richard S. Cahoon
Licensing Biotechnology Inventions
by John W. Freeman
Potential Use of a Computer-Generated Contract Template System (CoGenCo) to Facilitate Licensing of Traits and Varieties
by Anatole Krattiger, John Dodds, Donna Bobrowicz
Problems with Royalty Rates, Royalty Stacking, and Royalty Packing Issues
by Keith J. Jones, Michael E. Whitham, Philana S. Handler
Trade Secrets and Trade-Secret Licensing
by Karl F. Jorda
Use of Trademarks in a Plant-Licensing Program
by William T. Tucker, Gavin S. Ross