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Patent & Technology Licensing Transactions
Tynax brokers profitable license agreements for
patents, technologies, software code, copyrights and a wide
range of intellectual assets. A license is a contractual
agreement providing permission for the licensee to use and have
access to certain property for a certain period of time. For
patents and technology assets there are a wide range of
licensing structures and arrangements available ranging from
non-exclusive, limited scope licenses to exclusive worldwide
licenses with rights to enforce/litigate in court.
Typical Technology Sectors
Licensing transactions take place in all industries, however, the type of
arrangement differs from sector to sector. License arrangements in
healthcare/medical sector are very different from those in the software
industry. Semiconductor, OEM electronics components, communications and
other high-tech sectors each have their own licensing conventions and
peculiarities.
Some patents and technologies form complete products in their own right
and can be sold directly to the customer. But many new
developments are in the form of components that must be combined with
others in order to create marketable products. Generating revenues
from components and platforms often requires OEM and other license
arrangements in order to generate revenues--so licensing is a critical
activity in some technology sectors.
Typical Organizations
Corporate patent holders, universities and research labs often
operate licensing units otganized as offices of
technology licensing (OTL's) or strategic licensing groups
(SLG's). These teams specialize in selling patent and
technology licenses to large corporations, startups or other
organizations with the sales, marketing and distribution
channels necessary to bring new inventions and technologies to
market. |
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Transaction Process |
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As corporations are often very secretive about their R&D
activities, finding matching licensees for highly specialized
technologies is sometimes likened to finding a needle in a haystack.
The process takes time and effort, but can be very rewarding.
Depending on the technology, the process can take 3-12 months
from initial engagement to the closing of the transaction.
The following steps often summarize the process:
- Identify the technologies and intellectual property
assets to be licensed. This can be the result of a
cataloging process where the company's patent portfolio and
technologies are organized and analyzed.
- Develop marketing materials describing the licensing
opportunity and highlighting the benefits to a potential
licensee.
- Create Tynax exchange listing. Tynax creates a draft
listing that is designed to provide the key information
needed to trigger the interest of a potential licensee. The
listing is anonymous, so patent numbers are not included in
this listing.
- Syndicate the listing to potential licensees worldwide.
The listing is posted on the Tynax exchange and syndicated
to technologists, their agents and brokers in the Tynax
network worldwide.
- Potential licensees selected from Tynax database. Using
our unique trading system and database of patent buyers, we
identify prospects with an interest in matching technologies
and topics.
- Listing promoted to global broker network. Tynax
discretely approaches patent brokers in the U.S., Asia and
Europe with the technology for licensing, providing them
with the information they need to present the opportunities
to their own buyers.
- Identification of short lists of potential licensees.
Tynax helps licensors select the most promising prospects so that
sales efforts can be focused on this short list of potential
licensees.
- Approach sales prospects. Tynax works with you to
approach sales prospects, present the assets and
technologies and explore various potential applications and
opportunities.
- Negotiate licensing terms. Tynax helps the parties negotiate
the structure and terms of the license. Various alternative
structures could be deployed depending on the nature of the
deal. Tynax has a network of resources to help. See
Key Negotiation Points below.
- Agreement and due diligence process. The terms are
agreed and legal documents are exchanged. The patents and
technologies to be licensed are studied by the licensee.
- Closing. The legal documents and due diligence processes
are completed, the transaction is closed, the intellectual
assets are transferred to the acquirer.
- Ongoing reporting and collaboration. The licensor
and licensee often continue to interact following the
closing of the license transaction. Depending on the
nature of the transaction, the licensor may provide
technical support and the licensee may report sales and pay
ongoing license royalties.
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Common Concerns |
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Patent holders approaching potential licensees are often surprised
to find their friendly discussions result in legal
activities that are distinctly unfriendly. This is a result of
the concern from licensees that the approach is a prelude to
litigation for patent infringement. The way the potential
licensee is approached is very significant--if a reasonable
threat of infringement litigation can be perceived by the
licensee, then the licensee has the right to pre-empt the case
by bringing a lawsuit of its own. If the approach is made by an
experienced intermediary such as Tynax, acting on behalf of the
licensor, then the threat of litigation perceived by the
licensee can be controlled, and removed in most circumstances. |
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Key Negotiation Points |
The process of licensing involves forming an
ongoing relationship between the licensor and licensee. As the
arrangement has to stand the test of time, it is important that
a win-win structure is found and that each party feels positive
about the outcome of the negotiation.
A licensing agreement can be relatively complex so the
negotiation involves balancing a variety of objectives and
concerns. Typical negotiating points include the size of
the initial up-front license fees, ongoing royalties, duration
of the license, termination and expiration terms, exclusivity
and fields of use.
See our
paper on technology licensing agreement
for technologists. |
| Why Tynax? |
With its online exchange, global broker network and extensive database of
licensees, Tynax offers more reach--access to a wider audience of
potential licensees. With thousands of listings, Tynax has more
dealflow and this attracts active buyers and licensees.
The Tynax team is experienced in arranging licensing transactions for
complex technologies. The online Tynax listing and syndication system is
more efficient and provides a faster, more effective process. |
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