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www.ip4inno.eu ip4inno Module 4C IP Licensing Name of SpeakerVenue & Date
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www.ip4inno.eu ip4inno is brought to you by: The European Commission, DG Enterprise & Industry The European Patent Office 19 consortium partners in the first ip4inno project This particular module was written by: Theo Stamatiadis - Theia www.theia.eu with funding from the EC and EPO
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www.ip4inno.eu The Disclaimer! This training material concerns intellectual property and business strategies only in general terms. This training material should not be relied upon when taking specific business or legal decisions. Rather, professional advice should be obtained which suits the circumstances in question.
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www.ip4inno.eu Overview of the module Slides 5 – 11: What is a license and why licensing Slides 12 – 16: Before negotiating a license, due diligence Slides 17 – 51: Core content of licensing agreements Slides 52 – 61: The negotiation of a licensing agreement
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www.ip4inno.eu Which IP rights can be licensed? Registered IP Unregistered IP Soft IP Patents Utility models Registered trade marks Registered designs … Copyright Database right Unregistered trade marks Unregistered designs Know-how Trade secrets Confidential information
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www.ip4inno.eu An IP License Intellectual property can be exploited directly and/or indirectly Licensing agreement: the owner of IP (Licensor) grants to the Licensee the right to use the IP The Licensor maintains the ownership of the IP
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www.ip4inno.eu Some good reasons for licensing Generate profit Accessing technology Enter into an R&D collaboration Settle an infringement claim Cross licensing
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www.ip4inno.eu Some good reasons for licensing Generate profit Accessing technology Enter into an R&D collaboration Settle an infringement claim Cross licensing
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www.ip4inno.eu Some good reasons for licensing Generate profit Accessing technology Enter into an R&D collaboration Settle an infringement claim Cross licensing
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www.ip4inno.eu Some good reasons for licensing Generate profit Accessing technology Enter into an R&D collaboration Settle an infringement claim Cross licensing
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www.ip4inno.eu Some good reasons for licensing Generate profit Accessing technology Enter into an R&D collaboration Settle an infringement claim Cross licensing
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www.ip4inno.eu Before the negotiation Information regarding the licensor/licensee Information regarding the technology and its context Information regarding the legal status of rights Information regarding the business environment
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www.ip4inno.eu An example of due diligence A new industrial process for leather dyeing Protected by patent Supported by secret know-how What due diligence for the patent and know-how?
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www.ip4inno.eu Due diligence in patents Ownership, legal status, geographical scope Patented technology and its context
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www.ip4inno.eu http://www.epo.org/patents/patent-information/free/espacenet.html The esp@cenet database has over 65 million documents!
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www.ip4inno.eu Due diligence in trade secrets Licensor trade secret policy Confidentiality agreements with employees Other licensees in possession of the secret
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Defining the subject matter Identify all necessary rights Define the subject matter correctly Pay particular attention to soft IP
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www.ip4inno.eu Defining the subject matter Identify all necessary rights Define the subject matter correctly Pay particular attention to soft IP
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www.ip4inno.eu Defining the subject matter Identify all necessary rights Define the subject matter correctly Pay particular attention to soft IP
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu The rights granted Considering the purpose Considering the subject matter
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www.ip4inno.eu Exclusive/sole or non-exclusive Exclusive license Sole license Non-exclusive license
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www.ip4inno.eu Exclusive/sole or non-exclusive Exclusive license Sole license Non-exclusive license
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www.ip4inno.eu Exclusive/sole or non-exclusive Exclusive license Sole license Non-exclusive license Milestones Minimum royalties Exclusivity term …
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www.ip4inno.eu Exclusive/sole or non-exclusive Exclusive license Sole license Non-exclusive license Most favoured license
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www.ip4inno.eu Territory and/or field Territorial restrictions Restrictions in fields of application
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www.ip4inno.eu Sublicensing rights Following licensor’s approval Specific number of sublicenses To specific entities
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Royalties and lump sums Lump sum at the signature of the agreement Lump sums for milestone achievements Running royalties
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www.ip4inno.eu Royalties and lump sums Lump sum at the signature of the agreement Lump sums for milestone achievements Running royalties
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www.ip4inno.eu Royalties and lump sums Lump sum at the signature of the agreement Lump sums for milestone achievements Running royalties
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www.ip4inno.eu Royalty variables Royalty rates may change Minimum/maximum royalties can be established
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www.ip4inno.eu Royalty variables Royalty rates may change Minimum/maximum royalties can be established
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www.ip4inno.eu Technology valuation Cost method Income method Market method
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www.ip4inno.eu Technology valuation Cost method Income method Market method
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www.ip4inno.eu Technology valuation Cost method Income method Market method
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www.ip4inno.eu Technology valuation Cost method Income method Market method
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www.ip4inno.eu Additional considerations How important is the technology to the final product? What is the cost of commercialisation? What is the state of development of the technology? How important is the technology to the licensor? How big is the market?
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www.ip4inno.eu Information on royalty rates Press, technology reports, surveys Royalty rate databases (royaltysource.com, royaltystat.com, royaltyconnection.com, ktmine.com) Bibliography (lesi.org, ipresearch.com, technologytransfertactics.com)
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www.ip4inno.eu Source: Pricing the Intellectual Property of Early-Stage Technologies: A Primer of Basic Valuation Tools and Considerations RICHARD RAZGAITIS, IP Management in Health and Agricultural Innovation - A handbook of best practices (p.876)
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www.ip4inno.eu Adjustments, reports and audits Inflation, currency, other adjustments Technology and business reports by the licensee Right of the licensor to carry out audits
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Licensing agreements The parties (licensor and licensee) Purpose Definitions and subject matter Rights granted and restrictions Improvements Confidentiality Royalties, reports and audits Representations and warranties Infringement Term and termination
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www.ip4inno.eu Licensing agreement negotiation A strategic choice A long standing relationship Legal, technical and financial aspects
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www.ip4inno.eu Licensing agreement negotiation A strategic choice A long standing relationship Legal, technical and financial aspects
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www.ip4inno.eu Licensing agreement negotiation A strategic choice A long standing relationship Legal, technical and financial aspects
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www.ip4inno.eu Negotiating licensing agreements Search for a win-win agreement Take into account the other party’s interests Make sure that calculations are accurate
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www.ip4inno.eu Negotiating licensing agreements Be sufficiently prepared to negotiate Examine the licensed technology in detail Make business plans and acquire data
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www.ip4inno.eu Negotiating licensing agreements Seek “objective” criteria Provide evidence and sources of information Foresee future adjustments
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www.ip4inno.eu Negotiating licensing agreements Discuss the agreement as a whole Search for an overall agreement and avoid deadlocks Discuss conditions together with price
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www.ip4inno.eu Negotiating licensing agreements Time is always important Respect the time constrains of the other party and of the technology Good preparation and discussion, faster agreement
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www.ip4inno.eu Additional information and resources Exchanging Value - Negotiating Technology Licensing Agreements - A Training Manual http://www.wipo.int/sme/en/documents/guides/technology_licensing.html http://www.wipo.int/patent-law/en/developments/licensing.html http://www.wipo.int/sme/en/documents/guides/technology_licensing.html http://www.wipo.int/patent-law/en/developments/licensing.html IP handbook of best practices http://www.iphandbook.org/ http://www.iphandbook.org/ Intellectual property and technology transfer – European Commission http://ec.europa.eu/invest-in-research/policy/ipr_en.htm http://ec.europa.eu/invest-in-research/policy/ipr_en.htm
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www.ip4inno.eu Thank you for your attention! Over 50 teaching hours of material, case studies, exercises, links and more can be found on www.ip4inno.eu
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