Group 3:

Group 3: License options, Option term on license, Right of firstrefusal, Scope of license, Exclusivity Erica Yesenia Betancourt Universidad Nacional Abierta y a Distancia Vicerrectoría Académica y de Investigación Course: Valuation and Negotiation of Technology Code: 212032

GWHY GRANT LICENSES? How do companies meet this demand for products and services? new or better services and provide them at a competitive price? The traditional engines of economic growth, namely land, labor and capital, are no longer sufficient to provide the competitive advantage that differentiates companies that, on the other hand, are very similar to the others. The answer lies in new technology or improved. Technology means many different things to many people. The Merriam-Webster English Dictionary defines technology as "the application practice of knowledge, the ability gained through the application practice of knowledge, or the manner of accomplishing a task, especially through the application of procedures, methods, or knowledge technicians".

IS THE LICENSING THE RIGHT STRATEGY? Before embarking on obtaining a technology license, that is, the acquisition of rights to use a technology developed by a third party, or grant a technology license, that is, grant a third party, through a license agreement, the right to use3 technology over which proprietary rights are held, it is important to determine, above all, whether licensing is the appropriate strategy. For an intellectual property rights holder the best strategy could consist of manufacturing and marketing the product in question

THE SALE IN COMPARISON WITH THE GRANT OF LICENSE Through the sale or purchase of intellectual property rights in relation to a technology (an operation that in legal terms is called "assignment"), those rights pass only from the seller to the buyer in a transaction. The technology is bought or sold for an agreed price. Only a few permanent obligations will remain between the seller (assignor) and the buyer (assignee). Often these transactions involve a single transfer of funds, but the financial compensation may differ in whole or in part and may depends on numerous factors or circumstances (for example, the success of marketing). A technology owner who does not have experience in marketing products and you don't want to be involved in day-to-day issues such as applying technology at work, you might find that the ideal solution would be to find a buyer for the technology and complete the transactions in a single transaction.

There are license acquisition opportunities that, added to the technological possibilities available to a company, can generate new products, services and opportunities. market.

In addition, licensing can help a company to commercialize its technology or expand its operations to new markets easier and more efficient than if you tried to do it on your own

Mediante la licencia, una empresa que no disponga de recursos para realizar actividades de investigación y desarrollo por su cuenta puede acceder a los avances técnicos necesarios para proporcionar productos nuevos o superiores.

The license grant allows the licensor to retain ownership of the property intellectual knowledge of technology and obtain from it an economic benefit, usually through royalty income

There is often a rush to introduce new products on the market. An agreement license that enables access to already established or readily available technologies can allow a company to enter the market faster and with innovative technology

Para el licenciatario

for the licensor

A company that is unable or unwilling to intervene in the manufacture of products could opt for the technology licensing, and delegating then that activity in one or more partners with increased capacity in terms of manufacturing, distribution of products at points of sale, knowledge and management of the local environment, and access to other specialized knowledge.

ADVANTAGES OF THE GRANT OF LICENSE.

A technology license could add a additional cost to a product that was not entrenched in the market. It is desirable to introduce new technologies, but only if the market can absorb its cost depending on the price that can be obtained for the product. Numerous technologies added to a product can enrich it technologically, but make it too expensive and prevent thus its introduction in the market..

A licensee may become a licensor's competitor. If you get the right to operate in the same territory, the licensee can "eat up" the sales of the licensor, with which he will earn as royalties less than what the lost sales would bring him in favor of his new competitor. The licensee can be more efficient or faster access to market than the licensor, because could have lower development costs or be more efficient.

TThe licensee could enter into a financial commitment with respect to a technology that it was not "ready" for exploitation commercial, or that it was necessary to modify to meet the business needs of licensee

Para el licenciatario

for the licensor

Sometimes the licensor's own investment can generate higher profits than activity carried out through an agreement of license.

DISADVANTAGES OF LICENSING