Technology Licensing: Strategy and Negotiation

Licensing of technology and its corresponding intellectual property is big business, and integral to the business plans and competitive strategies of start-ups and Fortune 500 companies alike. Because licenses are complex agreements with important legal consequences, it is tempting for business executives to delegate to lawyers the negotiation of the 'non-economic terms' of their companies' technology license agreements. The problem with such an approach, however, is that at their core, issues of license structure, scope and risk require business judgments, and not merely legal ones. Do we need exclusive rights, and if so, to what, where and for how long? Will this prospective licensee bring our technology to market, and how do we mitigate the risk that it fails to do so? Can this licensor support our development efforts, and will it stand behind its IP in the event of a problem? Do we expose the guts of our technology to the world and try to protect it with patents, or do we keep it close and rely upon trade secrets? While counsel can offer advice on all these questions, they cannot know your business and competitive environment as you do, or be relied upon to optimize business trade-offs that must align not just with your company's present markets and strategies, but with those you expect it to pursue in the future. This course is organized around two hypothetical companies seeking to negotiate a technology license agreement. Divided into teams representing one or the other of these companies, students collaborate over multiple sessions to develop a strategic business approach and then to negotiate the critical terms of a licensing agreement. Lectures are focused on the business, and to a lesser extent, legal issues arising in complex licensing arrangements, and are designed to give students the context and perspective they need to participate effectively in licensing strategy development and negotiation. By immersing teams of business students in a multi-session licensing negotiation, it is the objective of this course to enable them to better understand and more effectively navigate the strategic business issues that arise in the conceptualization and negotiation of technology license agreements.