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Topic: Licensing a project (Read 1 time) previous topic - next topic

MartynC

Hi,

I built a water drop device (www.dropcontroller.com) and have now been asked several times if I will license it. Since I have had several different inquiries I am starting to think about it. This would be a license for someone to build and sell the devices.

I have no idea how to go about this. Can anybody offer some pointers and advice?

Please note. At this point I also do not know if the offers are genuine or are likely to go anywhere.

Coding Badly


As far as I can tell you have provided everything necessary to build them.

What would be licensed?  The mobile phone application?  The Arduino sketch?


MartynC

#2
Nov 05, 2017, 09:27 am Last Edit: Nov 05, 2017, 09:28 am by MartynC
Possibly, the control apps are the main thing about the device but the source for these is also available.

Coding Badly


Under what license did you publish the source code?


MartynC

Free for non commercial use.

Coding Badly

#5
Nov 06, 2017, 08:27 pm Last Edit: Nov 07, 2017, 05:14 am by Coding Badly

At least your prospective partners are a little honest.  That's a good thing.

These are some of the things I learned from working with a boss who was unbelievably good at navigating contractual agreements (he often got paid no matter the outcome and the other side never balked when writing the check; the guy is a genius)...

1. Be prepared.  Know exactly what you want before you start negotiating.

2. Be more prepared.  Know exactly what aborts the negotiations.  Are you willing to enter into an exclusive agreement?  If the answer is "no" and the other side insists on it, walk away.

3. Be even more prepared.  Know the end-consumer price of the device and what the market offers.  What do other similar devices cost?  Does your version have more / fewer features?  Does your version have critical features missing from other ones?  And, in case you missed the point: more features = more money = bigger check for you.  In other words, try to determine a lower and upper bounds for what your piece of the puzzle is worth.

4. Never ever answer unasked questions.  Are you a friendly chatty sort of person?  Suppress the chatty part.  You should not be this guy but, as I said, do not talk about things that the other side has not brought to the table or that do not directly benefit you.

5. You will be giving permission to another party to use your property.  This is an appropriate time to find a lawyer who understands that sort of contract.  You may not need the lawyer but you should have one in mind.

6. Ask for more.  Whatever you decide from #1, ask for more.  Don't be unreasonable but don't leave money on the table.

7. Design an exit.  If the other side is selling junk do you want to be able to stop them?  Or, are you content to just get royalty checks?

8. The other side will want a non-compete.  Make certain that is time-limited.  If not, you could be giving them a license they just sit on solely to keep you from competing with something they already sell.

9. Ask lots of questions.  (May I have a copy of the prospective contract?  How many times have you entered into this sort of agreement?  May I speak to some of your other partners?)  This is an excellent way to determine if the other side is unscrupulous.

10. Ask questions that are important (list from #1) and questions that are just probative (bullshit tests).  A good probative example is "Have you been sued?"  A company of any breadth, depth, or longevity will very likely have been sued.  If they answer "no" you need to research if that was an honest answer.  If they answer "yes" the WAY they respond is important.  Evading the question or any follow up questions is a reason to be suspicious.  (Some part of a lawsuit is always public record.  Evasion is just childish.)

11. If possible, meet in person.

12. Have an idea of what the future you wants under different scenarios.  Things going well?  Do you want the agreement to just renew?  Should the price be adjusted for inflation?

13. Is the other side allowed to relicense / sublicense your property?

14. What happens if the other side goes out of business?  (The agreement may actually survive leaving you in limbo.)

16. What happens if the other side is acquired?

17. Pressure them to act.  Once an agreement is in place you should have a way to light a fire under their feet.  Fixed-price-and-time payments work; you get paid (e.g. $200 per month) whether or not they sell gadgets.  (Obviously, you should also be negotiating for royalties.)

18. Audit.  The agreement has to have open accounting from your perspective.  You should expect to be able to inspect / audit the books.  The agreements I have seen include conditions (e.g. no more often than twice a year; have to give 5 day notice; any associated costs shared by both parties).

19. Check your liability.  What is going to happen to you if the other side is sued?  Will they protect you?  Drag you into the fray?  Toss you to the wolves?  The agreement should spell out some / most / all of that.

20. Are patents in play.  Do any competing gadgets have patents?  Do those patents overlap with anything you have done?  (The other side is really the one responsible for this item but they may try to push the burden to you.)


MartynC

Wow, very detailed reply. Thank you.

You have given me a lot to think about and I guess I need to start asking questions.










Coding Badly


You are welcome.  Good luck.  Don't be shy about posting a follow-up.


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