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AUTM Online Professional Development

AUTM offers monthly Online Professional Development Courses so that technology transfer professionals can enhance their skills with targeted learning throughout the year.

Learn more about the AUTM Online Professional Development Series: Read an interview with program leader Jane Muir

Join Us for These Upcoming Courses:

Negotiation of License Agreements: Noon – 1 p.m. EST, November 13, 2008
Presented by: Jeff Combs
Who should attend: Beginner/Intermediate technology transfer professionals

Ideally, license negotiation is a cooperative process where both sides leave satisfied. Unfortunately, negotiations often deteriorate and become competitive. This session will explore strategies and tactics that can be used to promote cooperative negotiation and will discuss tactics commonly used in competitive negotiations. Strategies will be presented to keep the negotiation cooperative and to defend against competitive tactics.

• General strategies for successful and cooperative negotiation
• The difference between competitive and cooperative negotiations
• Discuss methods to foster a cooperative atmosphere for the negotiation
• Why do negotiations become competitive?
• Identify some potential causes of competitive negotiation
• Identify methods to restore a negotiation that is becoming or has become competitive
• What types of tactics are used by either party during the negotiation and discuss the ramifications of using such tactics
• Identify defense strategies for these tactics.

The term “valuation” can mean different things to different people. This course will explore the concept of “valuation” as it relates to our every day work in the technology transfer business. Concepts of identifying appropriate consideration (royalty rates, cash payments, etc.) for specific deals and technologies will be discussed. We will also explore the concept of “trading” what we think of as “typical” license consideration (royalties, cash payments) for “atypical” consideration (equity). In other words, “how much equity should I ask for in a deal if the licensee is insisting that we take equity?” In order to explore such concepts, a brief background of a basic income statement, financial projections, and discounted cash flow theory will be discussed.

• Identify types of financial consideration that may be part of a licensing discussion. Explain briefly some of the similarities and differences between such types
• Explain “comparable transactions” and the underlying financial justification of the financial terms of such deals
• Introduce a basic income statement and financial projections and how a discounted cash flow analysis relates to the value of an underlying licensed technology. Discuss how different types of intellectual property (patents vs. copywritten materials) might impact the underlying assumptions of such a model
• Discuss potential adjustments to comparable transactions, or alternatively a “build up” concept for identifying appropriate financial consideration
• Understand relatively simple concepts for translating certain types of consideration (i.e. royalties) into other types (i.e. equity). Introduce more complex concepts that make such translations challenging and difficult.

Most, if not all, current license agreements have an “Audit Clause”. This clause grants the right to the licensor or his representative to inspect the books and records of the licensee in order to determine if the submitted royalties have been calculated properly in accordance with the terms and conditions of the license agreement. This course is intended to assist you in understanding when is the best time to conduct an audit, what types of companies provide auditing services, and the criteria that should be considered in selecting a licensee to audit and both the tangible and intangible benefits of auditing your licensees. We will discuss the pros and cons of auditing in the first year of the agreement vs. a three year window or greater as stated in the license agreement. We will explore the most common types of errors the audit uncovers and discuss recommended language that pertains to the “Audit Paragraphs” and other accounting definitions. Finally, we will discuss why conducting audits is the only sure way of knowing whether or not compliance is taking place.

• Identify criteria for which licensees should be subject to audit
• Discuss the types of companies that are providing royalty audit services and the fee arrangements that may be obtained
• Discuss in detail the most common types of errors that are being found and relate how these errors may be avoided through the use of specific license agreement language
• Understand why conducting field audits are the only way to ensure compliance is taking place.

As more and more university technology licensing focuses on startup companies and small and medium sized enterprises, it has become increasingly important for university licensing professionals to understand the foundation of these new enterprises. How a private enterprise is formed and what drives management and attracts shareholders can spell the difference between success and failure of the company, and along with it a university technology license. Gaining an appreciation of the key elements of company formation and what role the university can optimally play in supporting and sharing in the company’s equity structure will provide university licensing professionals with guidance in structuring a mutually beneficial licensing agreement.

• Identify the basic company structures for startups and small and medium sized enterprises – whether university spin-offs or existing companies coming to the university to license technologies
• Gain a basic understanding of what the technology investment community (e.g. venture capital, angels, and angel networks) looks for in a startup company. Understand the key elements of a startup or small and medium sized enterprise that might affect the company’s ability to successfully commercialize a university technology that go beyond basic structure (e.g. investment backing, management profile, propensity for research investments, etc.)
• Learn how a university can participate in the equity structure of a startup or small and medium sized enterprise and what this means to the terms of a license agreement and go-forward relationship with the company.