Licensing-In
Licensing-in can be a way to accelerate new-product development and commercialization. If a technology has already been developed externally to a certain stage, licensing-in can be an excellent strategy versus beginning an internal project to invent around the technology; this can save time and money. Licenses can be exclusive or nonexclusive; exclusive licenses give the licensee the complete rights to a technology. For nonexclusive licenses, the licensor is free to license the technology to others. Other key provisions of licensing agreements include the royalty rate, field of use, term, and geographic territory.
For exclusive licenses, payments can include an initial fee upon signing, annual minimum payments, and annual royalty payments once the technology is commercialized. For nonexclusive licenses, it is common for payment terms to be annual royalties once the technology is commercialized.
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