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Stage 4: IT Negotiation - HEAD OF AGREEMENT - GROUP 2
By Lucio Fernando Orjuela P. Group 212032-148 
14''-18''
Payment schedule
Once the amounts to be paid or the royalty rate have been agreed, it is necessary to establish in head of agreement document when these payments for the exploitation of the license must be made, which can be:
+ A single payment made on signing.
+ A single payment on signing, to be deducted from the first royalties due.
+ X% on signing, the balance on achieving milestones A, B, C, etc. and/or
+ Quarterly, half-yearly or annually amounts (quarterly provides better control).
11''-14''
Royalties
This is the economic recognition that the licensor receives from the licensee for the exploitation of the license. The “25% rule” is a royalty rate that is used in many fields where licenses are negotiated, however, it is not the only way to set a royalty rate, but the important thing to consider before setting a royalty rate is to consider the costs, the likely selling price, and the net margin of the derivative product of the technology that is licensed, since the royalty rate is negotiated based on sales volume (sales projection), total sales, change in production costs and profits generated and there are also cases where it is necessary to market approach of royalties paid in similar environments to establish the royalty rate.
9''-11''
Costs
The main associated costs are related to the transfer of technology (the purchase of equipment or the adaptation of current technological tools to adapt them to the new technology), the work of developing the technology (the costs of materials, equipment and other requirements to fine-tune the technology so it can be commercialized) and in the event that it is a joint effort, the costs of obtaining the patent.
0''-9''
Why is important the head of agreement document?
This document is important because it´s the legal summary of the commercial agreements between the licensor and licensee. It is very important that license negotiators are clear on what it is giving and receiving form the agreement and that each party is content with the final deal reached and has gained a sense of trust and fairness from the others.
The head of agreement contains the important aspect of the negotiation, be it a research collaboration, a licence agreement, a licence option agreement, patent exploitation agreement, or other.

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Transcript

Stage 4: IT Negotiation - HEAD OF AGREEMENT - GROUP 2

By Lucio Fernando Orjuela P. Group 212032-148

14''-18''

Payment schedule

Once the amounts to be paid or the royalty rate have been agreed, it is necessary to establish in head of agreement document when these payments for the exploitation of the license must be made, which can be: + A single payment made on signing. + A single payment on signing, to be deducted from the first royalties due. + X% on signing, the balance on achieving milestones A, B, C, etc. and/or + Quarterly, half-yearly or annually amounts (quarterly provides better control).

11''-14''

Royalties

This is the economic recognition that the licensor receives from the licensee for the exploitation of the license. The “25% rule” is a royalty rate that is used in many fields where licenses are negotiated, however, it is not the only way to set a royalty rate, but the important thing to consider before setting a royalty rate is to consider the costs, the likely selling price, and the net margin of the derivative product of the technology that is licensed, since the royalty rate is negotiated based on sales volume (sales projection), total sales, change in production costs and profits generated and there are also cases where it is necessary to market approach of royalties paid in similar environments to establish the royalty rate.

9''-11''

Costs

The main associated costs are related to the transfer of technology (the purchase of equipment or the adaptation of current technological tools to adapt them to the new technology), the work of developing the technology (the costs of materials, equipment and other requirements to fine-tune the technology so it can be commercialized) and in the event that it is a joint effort, the costs of obtaining the patent.

0''-9''

Why is important the head of agreement document?

This document is important because it´s the legal summary of the commercial agreements between the licensor and licensee. It is very important that license negotiators are clear on what it is giving and receiving form the agreement and that each party is content with the final deal reached and has gained a sense of trust and fairness from the others. The head of agreement contains the important aspect of the negotiation, be it a research collaboration, a licence agreement, a licence option agreement, patent exploitation agreement, or other.

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Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum lorem sit amet. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam.

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum lorem sit amet. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam.

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Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum lorem sit amet. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam.

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Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum lorem sit amet. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam.

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