1. Licensing Tactics for University TTOs: Licensing Tactics for University TTOs: How to Turn the Tables on Corporate Negotiators By Kristie D. Prinz, Esq., Managing Principal The Prinz Law Office for: © 2011 The Prinz Law Office.1

2. I. Preparing for the Negotiation: Understand the Perspective of the Corporate Negotiator Corporation is often in the exploration stage; the decision to launch the new product line is contingent on success of negotiation The anticipated ability to ramp up sales under the proposed licensing structure will be key to moving forward Role of TTO is in part to convince corporation that the business plan makes economic sense to pursue © 2011 The Prinz Law Office.2

3. I. Preparing for the Negotiation: Understand the Perspective of the Corporate Negotiator Research the background of the Corporate Negotiator Inform yourself on the then-existing business factors facing the corporation and corporation’s industry Be informed as to any history that exists between your TTO and the corporation © 2011 The Prinz Law Office.3

4. II. Preparing for the Negotiation: Clarify the Position of the TTO before Initiating Negotiations Know what the ideal result for the TTO would look like Will you walk if you are unable to get your ideal terms? How much leeway does the TTO give you to negotiate? © 2011 The Prinz Law Office.4

5. III. Preparing for the Negotiation: Build a Relationship with the Corporate Negotiator Conveys to the Corporate Negotiator that you are serious about getting the deal done Encourages openness and honesty about what it will take to close the deal Lays foundation for building a productive business relationship Caution: Corporate Negotiator will see through any disingenuous efforts and may use them against you © 2011 The Prinz Law Office.5

6. IV. Preparing for the Negotiation: Initiate Talks from a Reasonable Starting Point Send the Corporate Negotiator a fair and reasonable term sheet to demonstrate you are serious about the deal Corporate Negotiator will critique terms and advise corporation if it appears a deal may be difficult to reach Do your due diligence to make certain your term sheet is reasonable; consult with other TTOs and even consider hiring third party consultant © 2011 The Prinz Law Office.6

7. V. Preparing for the Negotiation: Know what your Technology is Worth in the Marketplace Know what other companies will pay for the technology Know what it will cost to manufacture, market and sell the product, and what kind of revenues the product is likely to generate on the open market Have some understanding of how long it will reasonably take a corporation to ramp-up its manufacturing and commercialization efforts © 2011 The Prinz Law Office.7

8. VI. Preparing for the Negotiation: Do your Homework and Refresh Memory on Past Deals Refresh your memory on past deals with the corporation and with similarly situated third parties Understand what kind of investment the corporation has already made in the research which has generated the technology Know what terms you have previously agreed to with corporation or with similarly situated third parties © 2011 The Prinz Law Office.8

9. VII. Managing the Negotiation: Adopt and Maintain the Right Tone in the Negotiations Anticipate Corporate Negotiator will evaluate not only what you say but how you say it Wrong tone to the negotiations can kill the negotiations whereas the right tone can close the deal and enable you to obtain critical concessions Tone should be confident, sincere, empathetic, and should convey openness © 2011 The Prinz Law Office.9

10. VIII. Managing the Negotiation: Anticipate Deal- Killer Issues and Throw-Away Issues An experienced Corporate Negotiator will raise issues that the corporation has already labeled as “throw-aways” along with “deal killers” Anticipate which issues are “throw-aways” and which issues are “deal killers” Pinpoint where to make concessions that will advance your position © 2011 The Prinz Law Office.10

11. IX. Managing the Negotiation: Give Your TTO Room to Negotiate and Make Smart Concessions Put all possible options for compensation on the table at the start of the negotiation Start with a narrow license grant and field of use Plan for 4-5 rounds of negotiation and prepare for the same number of likely financial concessions © 2011 The Prinz Law Office.11

12. X. Managing the Negotiation: Avoid Negotiating Specifics Too Soon in the Negotiations Avoid starting the negotiation with multiple impersonal rounds of exchanging drafts by email; get Corporate Negotiator on the phone early on Keep early conversations as general as possible Focus initially on points of agreement to get a better sense of how far apart the two parties’ positions are, then move to broad concepts of concern © 2011 The Prinz Law Office.12

13. XI. Managing the Negotiation: Propose Possible Solutions rather than Articulating Roadblocks Avoid roadblock responses until you are ready to walk from the deal Listen to the Corporate Negotiator’s concerns and proposed terms dealing with those concerns Provide compelling arguments as to why a proposed term is unacceptable Propose a solution that attempts to address the Corporate Negotiator’s concerns © 2011 The Prinz Law Office.13

14. XII. Managing the Negotiation: Never Let the Deal Get Cold TTO timetable dictated by school calendar Corporate timetable often dictated by quarterly financial reporting calendar If deal drags, then it gives corporation a reason to start exploring its Plan B Run risk of negotiating deal with corporation which has already decided not to close the deal, wasting valuable TTO resources © 2011 The Prinz Law Office.14

15. XIII. Managing the Negotiation: Know When to Walk Away from the Negotiating Table Reasons to Walk: Inability to work with Corporate Negotiator and/or corporation Company continues to insist on license that you are unable to offer Terms do not meet your minimum financial requirements Company is unwilling to agree to reasonable commercialization timetable © 2011 The Prinz Law Office.15

16. XIV. Managing the Negotiation: Final Thoughts on Best Practices Against Corporate Negotiators In the end, success at negotiation will be dependent on your TTO’s ability to provide terms that meet the business needs of the corporation Negotiation can be viewed as a series of intricate dance-steps, but ultimately it comes down to whether there is a business justification for the TTO and the corporation to do business together. Can enough money be made and is the business relationship strong enough to move forward? © 2011 The Prinz Law Office.16

17. Questions? Utilize the chat box to the bottom of your screen to submit a question to the panel. Please address your question to a specific presenter. OR Press 01 on your touchtone phone and this will place you into the phone queue. © 2011 The Prinz Law Office.17

18. Contact Information: Kristie D. Prinz, Esq. The Prinz Law Office P.O. Box 1594 Los Gatos, CA 95030 kprinz@prinzlawoffice.com 408.884.3577 (phone), 408.317.0316 (fax) www.prinzlawoffice.com © 2011 The Prinz Law Office.18