22nd okt, 2009

Why licensing negotiations fail

Reading a presentation from the Licensing Executives Society I had some thoughts to share. 

 

In the presentation LES states that 50% of the licensing deals are unsuccessful mostly because the parties can´t agree on a price. The reason for this is that 2/3 of the deals do not take place on the basis on a formal valuation model. 

The presentation does not continue its analysis but I find that the lack of valuation and resulting disagreement must have its origin in the fact that the organizations involved in licensing deals have no or a distorted view of the IP´s importance. The cure for this is of course knowledge of the strategic importance of your IP in relation to both your company and the market. So how to get this strategic view? IP must be an integral part of the company strategy, meaning that management and marketing are involved in IP decisions and the other way around.

People interested in the ongoing FTC process “The Evolving IP Marketplace” which also deals with licensing matters can look here. 

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