The importance of a deal is not always measured in dollars. At least not the dollars directly involved in the deal. A Boston-area research institution saw recently, for example, that an impasse on one deal was holding up many others.
It had spent most of 2007 in complex negotiations with a large, Scandinavia-based multi-national corporation. The deal involved a combined patent and copyright license to the institution’s research software.
The parties had worked out a general business deal, but had hit a wall. They couldn’t agree on definitions which would determine the payments to the institution. This was familiar territory.
After months of getting nowhere, the research institution called Goulston & Storrs. Because the parties had been contentiously negotiating for so long, our team (led by Karin Rivard) approached the issue differently. We asked the research institution what it expected as annual revenues from the license.
Naming a “success amount” was key to our negotiating strategy. We recommended that our client consider adopting an annual minimum royalty that exceeded this figure, regardless of how the income from product sales would be treated.
When negotiations resumed, we reminded the parties of their common ground. This set the stage for the offer: That the research institution could accept the company’s position on definitions in exchange for an annual minimum royalty.
The company immediately agreed. With a simple, easy-to-apply solution, we removed the basis for argument and closed the deal. It was a win-win solution for both parties.
Despite the relatively small dollars involved annually (a modest, five-figure amount), the impact of the deal for our client was substantial. Through our efforts, the institution’s licensing personnel learned a valuable tool to overcome similar impasses.
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Karin Rivard is a member of Goulston & Storrs' Innovation, Development & Licensing and Intellectual Property service areas. Let her know if you’d like a more detailed look at how her team helped this client.