
Facilitating Negotiations
The final step
After we have found someone who is sufficiently interested in the invention, the next step is to begin negotiations. The goal is to find a deal that meets the requirements of all parties. The deal includes two pieces: The Package, and the Price.
Defining both of these elements is the goal of the Negotiations step. The package is what will be sold and contains not just the rights to the patent but may include other things as well such as, know how, samples, demonstrations, consulting time and any number of other things requested or offered by either party. In some cases a test is proposed and further phases of the deal are contingent on its successful conclusion.
The Price includes not just what would be asked to buy the technology , but also the terms and conditions of the sale. There are various degrees of exclusivity which can be based on market or geography. Further the deal can be structured in any number of ways. The three structures we find most common are Sale, License and Option.
Going further into detail, a License incudes such elements as the downpayment, royalty rate, term and annual fee (often based on minimum sales numbers)
The combination of a Package with a Price is defines an Option. ITTr uses an Offering Sheet on which all of these elements of the option are recorded. Offerings recorded on this worksheet include the offered price, the selected option and the duration of the offer.
The final version of an agreement to sell or license is usually prepared by attorneys, but the information that they use comes partially from the offering sheet.
The negotiation process itself has several steps, and usually begins with a conference call involving most if not all of the parties to the proposed deal.
ITTr feels it is important for us to be in attendance at these meetings, which often fall into arguments on minor points, if not focused. In the negotiations we define both the package , the terms and conditions and an asking price. At some point the interested party may make an offer. That sets off an exchange of offer and counteroffer much like a real estate negotiation. Not just the price but other items of either the Package or the Price may change in the negotiation process.
Attorneys may become involved at this point to put the agreement into the form of a contract which can be signed at a closing where all parties will be present and where initial payments may be made.
To Learn more about this process and how ITTr can help you make the deal at the price you want contact us.
Email : rblazey@ittrifecta.com
Phone: (585) 520-3539
www.ITTrifecta.com