Re: Licensing terms

[Derek Pater]

Re: Licensing terms

by Derek Pater » Fri Sep 18, 2009 4:10 pm

Derek Pater

Brown Belt

 

Posts: 517

Joined: Fri Jul 25, 2008 3:11 pm

Location: Melbourne Australia

I am not very happy about the terms, can someone tell me if these terms are fair:

A. I have the right to terminate the Agreement if
i. Licensee does not sell at least five units of a product based upon or comprising the "Licensed Product” within 36 months of the date of this Agreement.
ii. Licensee materially breaches a material provision, term, or condition under this Agreement.
I know they are building high price product, but 5 units?

B. My Payments including
a. Licensee shall pay to Licensor a royalty of:
• X% of the gross sales of all Licensed Products sold.
• Additional details: Gross sales are the price of the product minus the cost of the goods and services needed to produce the product. Gross sales don’t include the price charged by licensee for installation, repairs and other revenues.

Question: does Gross sales usually calculated this way?

Licence Agreements are all about Negotiating the deal, re-submit a changed version to what you are after and in the end it could be a compromise between the two offers.
Royalties can also be a % of the net price to the distributors depending on the product or end price retail thats rare, it seems like a half hearted offer, real offers are a upfront fee of say $3,000- USD+ and Royalties plus the manufacture carries all tooling and Patent cost’s.
My biggest concern is you are working for this Company that is offering you a Licence Agreement, all very good when all goes well, if it goes bad that can cause problems at work.
Can you get a Government grant for your Wind energy generator , we have heaps of grants in Australia for new green product what about the U.S?
Contact two other ideal manufactures and see what they offer also!

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