What are typical conditions to for a licensing company that sells products to a company that gets bought? Should the contract be renegotiated?

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Hello - I work as an in-house transactional attorney for a US-based website with 20 million monthly unique visitors around the world, and I've worked on several licensing and ad-rep deals for several countries in Europe, South America, Australia, etc. There are several ways to protect yourself, but at the end of the day you have to trust your partner that you they will want to be honest so you can continue doing business together. That said, you should give yourself an audit right. Not sure what the software is and if it directly correlates to sales, but if so see if you can track yourself or use a third party's tracking software so you can compare numbers with theirs. Also consider including in the agreement a dispute clause, something to the effect that if you dispute their report for a quarter they will have x days to provide you with sufficient evidence to reconcile the dispute to your satisfaction - if not, you can terminate the agreement. Another way to protect yourself would be to ask for a minimum guarantee, but depending on the deal that may be difficult to work in. As far as working internationally, I think the hardest part there is ensuring collections and that you are paid in US dollars. Stand strong on keeping venue and choice of law in the jurisdiction in which you reside, not in theirs. If you'd like to schedule a call to further discuss, I'm happy to chat, let me know! Best, Jeff

I am a patent attorney generally on the patent owner's side. Signing such a clause should make you nervous. You don't want to be responsible for the major company's infringement. The major company is likely getting more benefit out of using your software than your company is making by selling licenses. The previous gentleman's answer is incorrect. Anyone can be sued for patent infringement if they make, sell, or *use* the claimed invention. It depends on the claims in the asserted patent. Based on experience, it's much more likely that the larger entity would be sued for infringement. A patent infringement case could cost anywhere between $350k-$5M+ USD. http://www.cnet.com/news/how-much-is-that-patent-lawsuit-going-to-cost-you/ In order to properly answer your question, I would need to know why you feel it's "very unlikely" that someone would sue the major company for using your software. If the major company won't back down on this provision, the best thing you can do is determine if you need IP (defense) insurance. If a patent attorney determines that it is necessary, raise the price of your license and get IP insurance.

First off, stop calling it an idea. (might be just that, but in licencing efforts you don't want to call it that). Second, what do you mean time is of the essence? This already started sounding risky. With that said, I believe you have two options, assuming that you can spend the next quarter reaching out and performing poorly in presentations and pitches to executives for licencing deals. 1. Learn the art of pitching and presenting, in my blog I have listed some books, one of them is presentations like Steve Jobs. Check it out here: unthinkeverything.blogspot.com (books are listed on the right) and hopefully secure a deal. The risk with this is that if you don't is time wasted. 2. Figure out a creative way to launch your innovation yourself, even if is simply to test for validation. It can be relatively inexpensive to do this (you didn't provide information on your patented idea so I can't help you on that yet). The upside of you launching your product or validation effort yourself is that it gives you exposure, it gives you business experience and most importantly it adds tangible value to your idea no longer putting you on the spot putting a random price point for it. This also makes it easier for you to approach companies and executives and if the licensing deal doesn't go through you have a business out of it. The reality is that if another business can make profit off a license, so can the owner of the product itself. Just have to figure out how.

A 0.31 second Google search located this: http://i.cdn.turner.com/nascar/.element/pdf/2.0/sect/kyn/NASCAR_Prospective_Licensing_Application.pdf