Negotiation in technology Transfer & Patent licensing

【行銷管理-談判策略及技巧】

林鴻六總經理 亞太智財科技服務 ( 股 ) 公司

How do we measure our success in negotiation?

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Key Points in negotiation
Understand the scope of discussion  Be sure that there is definitely a need to license  Clearly define the final goal of negotiation  Obtain management’s support for your strategy  Know all channels available to you  Set the direction of negotiation  Orchestrate the environment for negotiation  Lead negotiation into the avenue which is favorable to you

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Field of technology applications in technology transfer
COMPUTER INTEGREATED MANUFACTUREING CONSUMER ELECTRONICS SERVICE INDUSTRY OFFICE AUTOMATION AEROSPACE TELECOMMUNICATIONS CAR AND TRANSPORT INDUSTRY METATL/STEEL INDUSTRY SEMICONDUCTOR INDUSTRY

MICROELECTRONICS

FOOD PROCESSING INDUSTRY PHARMACEUTICAL INDUSTRY AGROCHEMICAL INDUSTRY BIOTECHNOLOGY FINE CHEMICALS NEW MATERIALS PETROCHEMICAL INDUSTRY WASTE PROCESSING INDUSTRY BIOMEDICAL MATERIALS AEROSPACE INDUSTRY] TEXTILES INDUSTRY 8/17/02 Dr. Leo H. Lin, ATIPS propriatory

Nanotechnology

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Do you want to rely on crystal ball fortune teller for your success?

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Worldwide market Coverage

Geographic Area North America Europe Asia & Pacific Rim Africa & Middle East Caribbean, South & Central America

Patents 12,656 6,970 2,306 63 4

21,999 Patents Total Worldwide (EOY 1994)
Darkened areas designate countries/jurisdictions in which AT&T has active patents.

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Jurisdiction
United States Canada Great Britain Germany France Netherlands Japan Italy Taiwan, ROC Sweden Belgium Australia Korea Spain Switzerland Singapore Hong Kong

Number of Active Patents

Active AT&T Patents by Jurisdiction

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8719 3899 1454 1389 1291 708 691 687 602 513 360 342 314 270 171 147 140

(EOY 1994)

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* - “All other” consists of 35 jurisdictions in which AT&T has between 1 and 51 active patents

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All Other

302

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Valuation of technology!!!
Market potential Financial strength Product value

Tech. impact
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Market share
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Technology Transfer negotiation
Terms
A. The content of technology B. Detail Training requirements C. Location of manufacturing D. Sales territories E. Payment terms F. Technology update G. Third party infringements
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H. Grant backs

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Positioning in negotiation
Extreme Hard Position Make offers acceptable to both sides

Concede generously

No resistance

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Negotiation Tactics
      

Develop options Working relationship Clarify interests Decision making Apply external standards Legitimacy Communication

    

Evaluating everyone Credibility Look behind position Consider impacts looking for fairness To prevent bluffing Listen actively
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 

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Keys factors in a successful negotiation
Develop options Working relationship Clarify interests Decision making Apply external standards Legitimacy Communication
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Evaluating everyone Credibility Look behind position Consider impacts looking for fairness To prevent bluffing Listen actively
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Key factors in a Successful Negotiation
 Authorization

and delegation  Timing for decision making  Understanding of the situation  Clear picture of relevant factors  Identifying key interests for both parties  Appropriate influences  Understand differences
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Relationship Vs Interests
 Which

is more important -- Relationship or Substantive Interests? Can be both!  Should we trade off Relationship for Substantive Interests? No!!  Build a working relationship  Pursue Substantive Interests on their own merits
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Negotiator’s personality and attitude make the difference
     

Competitive, aggressive Egocentric, selfinterest Winning is the only goal No trade off Ignorance, simplicity Non-commitment

     

Goal oriented Detail understanding of both sides’ needs Willing to listen to the other side Not self centered Always consider impact to both side Win-Win attitude
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How to conduct a Negotiation with patent owner?
Balance the situation with Negotiation with fact Face the litigation by cost factors strength Negotiation from your fact Consider royalty as part of Prove to them that you product cost the situation it understand and balance with potential litigation cost

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Patent Licensing Negotiation
 Number

of patents granted in the licensing  What is the real impact of patents to be granted in licensing?  Are future new patents to be included?  How to calculate royalties?  What is the effective period of the licensing?  Is there grant back requirement?
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Royalty rate item subject to fees deductions payment period

Sales territory Manufacture territory

Patent licensing Scope of patents grant right

Exchange rate tax, interest rate penalty for late payment
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Application law litigation country arbitration
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What terms & conditions should be attended to?
Upfront fee Annual royalty rate? Learn the terms and conditions first Late payment interest? Payment period? How many patents are licensed to you? Any future patent involved? Bookkeeping process
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Technology and market concept match in today’s environment
• • • • • •

Dynamic business environment in 21st century: New technology, new market and new business concept Internet business concept dominate market approach Worldwide reach is key to new business concept Artificial intelligent information development create virtual business world 5. New business is always associated with new technologies

Winning is not everything, it is the only thing! Get a Win-Win position
 Separate

problem  Work from interests, not positions  Looking for options which will benefit both parties  Minimize antagonizing events  Search for Common ground  Establish trust and credibility
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the people from the

Product failure—New Cock Cola
 Cock

Cola has been a great marketing success, however, in earlier 1980s, they introduce a new flavored Cock Cola with the expectation to create new customer interest; Unfortunately, it was completely failed due to customer rebelling, it forced the company to reintroduce the classic cock cola.
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