1. WIPO NATIONAL WORKSHOP ON NEGOTIATING TECHNOLOGY LICENSING AGREEMENTS organized by The World Intellectual Property Organization (WIPO) in cooperation with The Ministry of Scientific and Industrial Research and The Council of Scientific and Industrial Research (CSIR) New Delhi India, July 4 to 8, 2005 Presented by Donald Bollella DB Technical Consulting Irvine, California, U.S.A.

2. Topic 10 Basic Principles of Technology Licensing Based on pages 29 to 31 of Exchanging Value by WIPO

3. 1. Preparing for Licensing Negotiations 2. Creating a Licensing Team 3. Due Diligence 4. Preliminary Agreements

4. 1. Preparing for Licensing Negotiations * Who are the parties to the prospective agreement? (University, R&D organization, Large Co., Small Co.) *What are the objectives of each party? (Is there a basis for a commercially viable agreement?) * What are the performance expectations? (Is each party able to perform what the other expects?) * Who should drive the licensing negotiations? (Internal Drivers vs. External Drivers)

5. 1. Preparing for Licensing Negotiations *What is the nature of the prospective Agreement? A. Manufacturing Agreement (Exclusive vs. non- exclusive) IP owner distributes. B. Royalties only. IP Owner does no manufacturing or distribution. C. R&D including royalties. IP owner provides some R&D support. (Joint Development Projects) D. Distribution Agreement Does IP owner provide R&D, Tech support, know-how, consultants, or other deliverables in addition to IP?

6. 2. Creating a Licensing Team Internal Team vs. External Team A. Technologists B. Legal Experts IP C. Business Executives D. Financial (CFO or Accountants)

7. 3. Licensor Due Diligence A. Is IP Valid? B. Patents being licensed, prepare claim charts when licensee is currently making and selling. C. Patents being licensed, prepare detailed product specifications when licensee is NOT making and selling. D. Does IP owner manufacture? If so, need counter- ammo analysis. E. Commercial reputation of licensee--financial, manufacturing, customer service.

8. 4. Preliminary Agreements A. Non-Disclosure Agreement (NDA) One-way vs. Mutual Confidentiality Agreement (CA); Secrecy Agreement B. Term Sheet/Heads of Agreement; Non-binding C. Letters of Intent; Binding vs. Non-binding D. Memorandum of Understanding; Binding vs. Non-binding E. Standstill Agreement, Licensor agrees to give prospective licensee exclusive consideration for period of time.