Strategic Alliances: Licenses, Collaborative Research & More
Emerging Companies Roundtable Takeaways
At the November 2013 Emerging Company Roundtable session, Sherry Flax and Phil Bogart of Saul Ewing moderated a discussion about maneuvering through a variety of strategic alliances, with a focus on relationships such as licenses and collaborative research. Thought leaders John Fortin of Lonza, and Rosel Halle of Johns Hopkins University, along with Saul Ewing attorneys Jacque Allen and Gianna Arnold, provided valuable information.
Key takeaway points:
1. Negotiating can be a challenge.
- Read and understand every clause in the agreement and any related attachments/exhibits before you sign anything.
- When negotiating the clauses, understand that there may be some areas where the other party cannot change the language. This can be particularly true with universities and research institutes.
- Establish realistic objectives and expectations.
- Enter the negotiations with an understanding of how you’re willing to use your deliverables and next milestones. Consider how you can help advance the goals of the other party and use that as leverage in your negotiations.
- Know your walk away point. At what point does it no longer make sense to formalize the relationship?
- Don’t just focus on completing the deal - executing the wrong deal can be more harmful than no deal.
- Don’t just focus on the risks – or nothing will be accomplished.
2. Entering into a licensing agreement must be done strategically. There are a few ways you can prepare yourself and get the deal done in a timely manner:
- Educate yourself on the people with whom you’re trying to make a deal. Different institutions have different driving forces motivating them to make a decision – understand what those drivers are. Contact companies that have worked with the institution to learn about their experiences.
- Have multiple options in play. If the relationships needed for Plan A are problematic, make sure you have alternatives.
3. Before entering into a strategic alliance:
- Does the relationship make sense for the future of your company?
- Does it aid in moving your company to a different stage or milestone?
- Know your marketplace and how you can use the license to your advantage.
4. Do your due diligence.
- Are you obtaining what you think you are obtaining and are you obtaining what you need?
- Will other license agreements be needed?
- Can you work with the parties involved?
- Will the reputation of the collaborating party help or hinder you?