Creating a Win-Win Deal; Key
Elements of Licensing
Contracts
D.C. Toedt
Wickford Georgetown Group, Inc
Irene Kosturakis
BMC Software, Inc.
Negotiations
12 Ways to Speed Up
Negotiations
12. “Scheduling order”
11. Process vs. outcome
10. Projector?
9. Timestamp all drafts
8. Term sheet
7. Playbook
6. Reasonable positions
5. Accept redlines
4. Explanations in
footnotes, Word
comments
3. Small agreements
early
2. Editable documents
1. Collaborative mindset
Negotiating a sales
contract with “Jerky Boy”
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Importance of sales contracts
Client looking over your shoulder
Sales commissions already “spent”
May need the deal for quarterly
numbers
Who should decide when to kill the
deal?
Drafting
Contract as business plan
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Who should (or might) make what
happen?
– Parties and their divisions, customers,
suppliers, partners, financers
– Competitors
– Government
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Brainstorm the “what ifs” in
the business relationship lifecycle:
– Startup; normal operations; trouble;
big trouble; shutdown
Contract Forms
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Whose forms?
The fewer pages, the better
(small fonts, 2 columns)
Use tables instead of run-on prose
Include examples, sample calculations
Concession packages – Ag / Au / Pt
levels?
Contract Drafting: Overall
Tone
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Hardball
– Eventually get more of what you want?
– Negotiation time
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Reasonable for both parties?
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E.g., mutuality of provisions
Less time to negotiate (can be important!)
Sets a tone for relationship
Better impression on execs, judge, jury?
5 Key Clauses to Consider
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Licensing provisions – tightly drafted
technology definitions and grant
Warranties for deliverables
Indemnities for actions
Termination rights – “out” clauses
Assignability
Problem Clauses
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Fuzzy warranties, no liability limits
Most favored customer
No assignment w/out consent
“Naked” caps on price increases
Promises for future deliverables
“Gross negligence,” “willful
misconduct”
Confidentiality Provisions
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Can be crucial
Paper trail requirement?
Term of agreement?
Confidentiality period?
Freedom-to-operate clauses?
Residuals clause?
PACTIX NDA (www.pactix.org)
Indemnity Provisions
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Initiation of Obligations (threat, judgment)
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Rights to cure (modify, replace, license,
refund)
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Competing obligations on code of two
parties and modifications
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Issues in re software used in combination
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Use for intended purpose
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