A licensing agreement is like any other legal agreement. You can’t just sign on the dotted line and fold up the agreement and put it away for safe keeping. Like a relationship, you must nurture all the parties involved. It’s a living, breathing and highly dynamic bond. Sure you’ve agreed to amounts, the frequency of payments, milestones, if any, and all the other details. But, as in life, things happen. What happens if one party doesn’t reach the milestone? Or goes bankrupt? What if there are manufacturing or shipping delays? What if the product composition or the amount of product isn’t exactly what you agreed upon? And, probably most commonly, what if the personnel change or the license gets shifted from the original department into some other department’s bailiwick? Yes, the license should cover most of these possibilities but sometimes things come up unexpectedly.
This is why, whether you are the licensor or licensee, it’s really important to develop and maintain your relationship with the other party since both fates might depend on it.
The Licensing Executives Society’s upcoming meeting deals with a lot of these issues. The focus will be on pharma, since that’s the 800-pound gorilla in the region. However, if you attend, there will be lots of valuable information to gleam. Here’s the link:
Here are some other examples of what can happen with copyrights, license rights etc.
My parting suggestion: Start a relationship with an Intellectual Property attorney who you trust. It’s always important to have a trusted and knowledgeable partner on your side.
Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.