Heads of Agreement

Definition and examples of every concept

costs: define who will pay all the costs of the technology tranfer, the development work or the patents costs, if apply and so forth. For this example, we consider both the licensor and the licensee, and taking into consideration the case the team have been working on, the licensee will pay all the costs related, this includes the technology transfer and the patent costs.

Payments schedule: It this about payments that have been agreed. Also agree when the appropriate payments should be made. For this example, the licensee will have to pay quarterly amounts, this is recommended because it provides a better control for both sides the licensor and the licensee.

Royalties: Minium royalties are generally an agreed lump-sum payment of reasonably expected revenue from the sale of a licensed product over the agreed time period. For this term, again, we will use an example related with the case of the study the team have been working on: the licensee will have to pay a 25% percent as minium royalty during the agreed time of period.

Why is important the head of agreement document in a technology negotiation? Before starting any exchange agreement, it is important to highlight all the aspects in order to have a planned interaction, so, the "Heads of Agreement" is very important because it provides a template with the key elements that should be discussed between the parties and establish the main parts of the agreement. Some aspects of this template are the parties, start date, costs, payment schedule, license options, among others.

Jhicson Castañeda Estrada Grupo: 212032_174 15/05/2024