Licensing may be the most appropriate way to commercialise your innovations in some markets, but you will necessarily lose some control over your intellectual property and your own ability to exploit it - you might also be seeding future competition.
It is critical to get any License Agreement right, and these are our Top 5 suggestions:
Carefully track other patents being granted in your space, and build families of patents to create a strong IP position. Be diligent about the enforcement of your IP rights from the outset.
Signing a License is only the start of your relationship. Your success is now tied to your Licensees success, and you are going to need to work in close partnership with them for a number of years.
Understand the value of your intellectual property, and the realistic commercial benefit that it might generate. Aim to share that benefit in a way that gives your Licensee real incentive.
Where you can, be flexible in your negotiation, and stay flexible in your relationship. Don't give up terms such as exclusivity easily, but similarly don't write them off simply on principle.
Major corporations will buy new technology from existing suppliers, or existing technology from new suppliers - but rarely new technology from new suppliers. Target your potential Licensees accordingly.
We can work with you to identify those companies best placed to exploit your IP, and to target these in a structured and proactive way.
We would consider their likely motivation as well as their technical competence or finances - for example, companies with a dominant existing market position often have less to gain from new innovation.
We have successfully concluded significant IP licences with major corporations in Japan, Korea, China, and the US and often have relevant first hand experience that we can share with you.
It is likely that you will want to agree Heads of Terms before entering full Licence negotiations. This will necessarily define what is being licensed and commercial terms, but also cover the respective obligations of Licensor and Licensee.
Realistic warranties and indemnities are often a sticking point, and we can usually offer practical advice on finding ways forward that should work for both parties.
If required, we can help you to source the expert legal advice essential through the negotiation process, and to execute a final Agreement.
The most successful Licensing companies invariably have strong relationships with their licensees. They offer good value initially, and continue to deliver good value moving forwards.
We have experience of working effectively with Licensees over the long term, and have found investment in relationships to be essential to maintaining royalty streams and/or selling upgrades.
As a rule, if you would not countenance a joint venture with a potential licensee, then you should be wary of selling them a license.
Over the last 6 months Hugh has worked closely alongside us to define our IP, structure license agreements, and consider the technology transfer process. His advice and experience have been of immense value, while he has also managed to open a number of doors for us in parallel.