Issue link: https://htpgraphics.uberflip.com/i/246988
Payment Provisions Relevant industry norms Section 6 Consider the type of IP you are licensing and what this has commonly been licensed for in the past. For example, the norm for the chemical and electronics industry tends to be a little higher than for consumer products. The pharmaceutical industry tends to be one of the highest. Your IP commercialisation office will have examples. If you ask for a percentage far higher than what you would expect based on the relevant industry norm – you may have to argue on what other basis the higher percentage has been requested. Degree of exclusivity granted If your licensee is obtaining an exclusive licence, this will be more attractive than a non-exclusive licence and a higher percentage will be justified. Strength of the licensed rights The stronger your IP (e.g. if your IP is registered or if your IP is particularly complex or has involved a high degree of development) the higher the percentage you may be able to justify. Amount of further investment required to bring the licensed product to the market It is quite common for the IP which you are licensing to be in a relatively early stage of development. If this is the case, it could take some time (often years) before your licensee is able to take it to market and see any financial return. Your licensee may still have to spend some considerable investment time and money on the IP in order to develop it fully to a marketable form. The more time and money your licensee is required to spend on the IP – the lower the percentage royalty your licensee is going to want to pay. 41