I this week did a licensing program with Rand Brenner, President & CEO at Licensing Consulting Group. Rand is a licensing expert assisting clients in the acquisition and sales of licensing rights. His recent assignments include acquiring licensing rights for clients to several national brands including Major League Baseball, The NFL and NCAA Football.
At the program I discussed ten considerations the parties to a license agreement should keep in mind when negotiating it. Here they are:
1. The license agreement must be a win-win for both sides or it will not work.
2. The more you don’t need to do the deal the more leverage you have when negotiating it.
3. If your sales channel is the Internet you have global rights.
4. Givers get; if you give exclusivity, you should get a higher royalty.
5. Don’t enter into a license without an exit strategy.
6. There is no one magic royalty number whatever the deal.
7. Set a royalty by looking at what licensees are paying in comparable deals.
8. The term of the license should allow the licensee a reasonable time to recoup its investment in the deal.
9. Negotiate with respect to build trust.
10. Take your time so that the license agreement creates a long-term, mutually-beneficial relationship.
Do you have other suggestions to add to this list? Please include them below. Interested in learning more about IP licensing? A useful book is IP Valuation and Management by Weston Anson. More information about the book here.
Also Rand Brenner is replaying our discussion in a series of webinars. For more information click here.