Michael Sandys: "The Good The Bad and The Ugly Regarding Licensing & Enforcement"
FAB LAB Talk 12 October 2011 The Good The Bad and The UglyRegarding Licensing & Enforcement Michael Sandys, Partner at QualitySolicitors Jackson & Canter
Licensing your I.P. There are various ways of commercialising your Intellectual Property (IP) and Licensing presents a good classic and cost effective way of bringing your Intellectual Property to the marketplace, whether it is a patent and know how or trade marks, designs and copyright. It is essential that the license terms are in writing and special attention should be given to drafting and negotiating such terms. By licensing you retain ownership (and certain control) of your IP whilst allowing others to exploit your IP which should have cost benefits.
Types of Licenses1. Exclusive License2. Exclusive and sole license3. Non Exclusive License4. Manufacturing License5. Joint Venture
The Licence Terms1. In writing2. Duration3. Define exactly what you are licensing4. Exclusivity, non exclusivity and sole5. Royalty streams and audits (speak to your Accountant)6. Improvements7. Pulling the plug8. Choice of Law9. ADR
ManufacturingLicense Agreement1. R&D2. Prototype3. Control of your IP4. Protection/Restrictive Covenants5. Indemnity6. Selling to the marketplace7. Ultimate control of your product and marketing
Avoid Slipping intoBad Ways Always do your homework/find out as much as possible in relation to who you are entering into a license with. Ask for references – be inquisitive. Undertake a company / credit search. Ask for examples of what they have achieved in the past.
Avoid Slipping intoBad Ways (Cont) … Ask for a copy of their latest business plan. Get a detailed cost breakdown and analysis in respect of prototypes. Spend time developing your objectives and think carefully about the Heads of Agreement (the foundation stones).
Enforcement(when things turn Ugly)1. The Lawyer’s letter2. Litigation and the risks3. ADR4. Costs and Insurance (BTE and ATE)5. Settlement Terms
Conclusion It is important to have the correct structure that fits your IP and the business objectives. Thought should be given beforehand as to what you want to achieve and how and also the milestones. You should consider the resources that you have and not stretch yourself too far. Do your homework beforehand and find out who you are entering into a contract with.
Conclusion (Cont) … Use an well experienced lawyer to ensure that the wording is carefully drafted in order to protect your IP. Finally always consider what you want to achieve if things do go wrong and plan ahead ie: the alternatives.
Contact Details Michael Sandys, Partner, Head of Commercial Tel: 0151 702 8747 Email: email@example.com