Michael Sandys's presentation to our Patent Box Workshop at Liverpool in London on 12 July 2013. The presentation deals with why commercialize IP, licensing IP, types of licences, licence terms, joint ventures and manufacturing licence agreements. It also contains a number of handy tips,
2. Why Commercialise
your I.P.
ï§ To generate income/royalties
ï§ To take your invention/creation to the next stage
ï§ To utilise marketing and sales resources of a third party (i.e. to get
to market)
ï§ To protect your interests/limit legal exposure
3. Licensing your I.P.
ï§ There are various ways of commercialising your Intellectual Property (IP)
and Licensing presents a cost effective way of bringing your Intellectual
Property to the marketplace, whether a Patent, Trade Mark, Design or
Copyright.
ï§ It is essential that the licence terms are in writing and special attention
should be given to drafting and negotiating such terms before they are
agreed and signed off.
ï§ By licensing you retain ownership (and certain control) of your IP whilst
allowing others to exploit your IP at minimum cost to you and usually
because the âLicenseeâ has something (e.g. market advantage/sales
opportunities) to bring to the table.
4. Types of Licences
1. Exclusive licence
2. Exclusive and sole licence
3. Non-Exclusive licence
4. Manufacturing licence
5. Joint Venture arrangements
5. The Licence Terms
1. Duration âThe Termâ
2. Define exactly what you are licensing
3. Exclusivity, non exclusivity and sole
4. âField of Useâ
5. Royalty streams and audits (speak to your Accountant)
6. Policing rights
7. Performance targets
8. Improvements
9. Pulling the plug/termination
10. Choice of Law and ADR
7. Manufacturing
Licence Agreement
1. R&D
2. Prototypes
3. Control of your IP
4. Protection/Restrictive Covenants
5. Indemnity
6. Selling to the marketplace (by you or a third party distributor/re-
seller)
7. Ultimate control of your product and manufacturing and marketing
8. Avoid Slipping into
Bad Ways
ï§ Always do your homework/find out as much as possible in
relation to who you are entering into a licence with.
ï§ Ask for references â be inquisitive.
ï§ Undertake a company / credit search / bank reference.
ï§ Ask for examples of what they have achieved in the past.
9. Avoid Slipping into
Bad Ways (Cont) âŠ
ï§ Ask for a copy of their latest Business Plan.
ï§ Obtain a detailed cost breakdown and analysis in respect of any
prototypes to be created. Set benchmarks and quality control.
ï§ Spend time developing your objectives and think carefully about the
Heads of Agreement (the foundation stones).
10. Enforcement
1. The Lawyerâs letter (Civil Procedure Rules)
2. Litigation and the risks
3. Patents County Court/small claims
4. ADR (mediation / Expert Determination)
5. Costs and Insurance (BTE and ATE)
6. Settlement Terms
11. Conclusion
âą It is important to have the correct arrangement in place that supports your IP and
reflects your business objectives/plan.
âą Thought should be given beforehand as to what you want to achieve and how and
also the milestones/performance targets (if required).
âą You should consider the resources that you have and not stretch yourself too far (the
reason for licensing). Plan ahead.
âą Do your homework beforehand and find out who you are entering into a contract with.
âą Use a well experienced lawyer to ensure that the wording of all agreements are
carefully drafted in order to protect your IP and your future market strategy.
12. Contact Details
ï Michael Sandys, Partner, Head of Commercial
ï Tel: 0151 702 8747
ï Email: msandys@jacksoncanter.co.uk