Head of agreement structure (Group 5)

Head of agreement structure (Group 5)

Sharid Fernandez RuizIndustrial Engineering Technology Valuation and Negotiation (Group 11) November 19th 2022

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What is Head of Agreement?

A Head of Agreement is a non-binding document that describes the basic terms of an interim agreement that the parties use before doing business or finalizing a formal agreement (also known as a "Term Sheet" or "letter of intent"). Such a document is commonly used in commercial transactions, such as the purchase of a business. In this presentation we will talk about some elements that must be considered in a head of agreement.

Infringement

The licensor might wish to have control over all infringements, but this depends on whether the licensee might be considered to be in a stronger position to win an action in the territory than the licensor. The parties should consider all options and make provision for such in the agreement. For small inexperienced licensees, the licensor may wish to have the option to take action against patent infringers himself.

Termination

Other than for any specific duration of the licence that may be agreed, the usual terms should be inserted into the agreement to cover material breach, receivership, change of control, etc.

Choice of law

This depends on the country of residence of the partners. If it is the same for both, choose the laws and jurisdiction of that country. If it is a transnational agreement, this decision may present a difficult negotiating point, as each probably will want the laws and jurisdiction of its own country to govern the agreement. Depending on circumstance, this is not always the best choice and each party should listen to the recommendation of its lawyers. Alternatively, the parties may choose the laws and courts of a neutral country as a compromise.

Dispute resolution

The parties may wish to choose arbitration or mediation as an alternative means to resolving disputes and include appropriate terms for this.

Examples

• Infringement: Personnel used by the Contractor in the production or creation of the Developed Material gives, genuine consent in writing.

• Termination: Either party may by notice to the other at any time terminate the head agreement at least thirty (30) days.

• Choice of law:This Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without giving effect to any choice of Law or conflict of Law provision or rule.

• Dispute resolution: All disputes arising out of or related to the terms and conditions of this Agreement, including the rights and obligations of the Parties, will be resolved amicably by mutual discussion, otherwise, they will be resolved through the designated adjudicating officer in accordance with the law.

Is important the Head of Agreement document in a technology negotiation?: They serve as a record of commitments for both parties who agree to work together and forge a connection that can be mutually beneficial and last for years.

References

John P Mc Manus. (2012). Intellectual Property : From Creation to Commercialisation: A Practical Guide for Innovators & Researchers. Oak Tree Press.