When a client looks to execute a manufacturing, distribution, or licensing agreement, we recommend that the client equip itself with as much useful information about its partner as reasonably possible in advance of the negotiations and certainly before any deal is inked.
PARTNER DOSSIERS are key to this valuable strategic intelligence.
The price of this strategic intelligence varies depending upon the client's budget, whether the prospective partner is a domestic or foreign company, how complex the partner's organization is, and the number and type of special reports that need to be purchased as inputs for the strategic analysis of the partner.
The benefits to being armed with strategic intelligence prior to negotiations, however, make the spend well worth it.
For example, a prolifically-innovative business was approached with a license agreement for a particular automotive invention. The pay-off for the business was $100,000 in an upfront royalty fee. The prospective licensee was a successful mom-and-pop towing business operating in several locations in the Midwest.
The business came to us to review the deal, already agreed in principle. To advise our client properly, we conducted in-depth research and compiled a Partner Dossier on the prospective licensee.
What we learned was a shock to the client! The licensee turned out to be a small subsidiary of a New York Stock Exchange-traded company worth hundreds of millions of dollars. Furthermore, the company had an exclusive contract for the Australian military and a similar contract in Germany to which our client's invention was perfectly positioned to contribute in a big way. Properly compensated, that deal should have easily run into the several hundreds of thousands of dollars, if not $1 million or more.
The proposed licensing agreement presented by the mom-and-pop business also attempted to exploit the kind of "aw shucks" ruse by which it had approached our client. The rights to be licensed by our client would, under than agreement, flow through the mom-and-pop straight to the NYSE parent company.
Fortunately, our strategic intelligence, along with the intellectual property rights flow analysis it enabled, helped the client have the information it needed to avoid a bad deal and put it on a more equal footing with its partner.
For more on how Partner Dossiers can assist you in getting the best possible deals for your business, please contact us at 208.939.4472 or info@TechnologyLawGroup.com.
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