The Fairy Tale Guide to Licensing
Stephanie Hsieh, began her career as an IP attorney helping a wide range of clients to find and negotiate their ‘happily ever afters,’ and now does the same for her company, Meditope. In this article, she shares some tips on how to avoid getting eaten by a wolf or stuck with a frog.
Licensing intellectual property can provide core revenue to your business. Everyone dreams of the fairytale deal … the brand name “Prince Charming” to fund your “happily ever after”! However, to truly maximize your IP’s value, it’s important to view any partnership as a long-term relationship. Don’t underestimate the challenges of finding the right partners and structuring a healthy marriage … I mean deal!
- “Prince Charming” doesn’t grow on trees! Have patience when searching for ‘eligible’ partners. Beyond brand names and deep pockets, make sure you’re truly compatible: Do they understand your business? Do they have the experience and reputation to help you advance? Do they share the same values? Is there mutuality? Diving in too quickly without really knowing your partner, at best, will waste time and, at worst, cause irreparable damage to your business. It’s easy (I know, I’ve done it!) to be lured by a sexy upfront payment, especially when you need the cash. Many times, my ‘Prince Charming’ ended up being a wolf in disguise. Thinking they could distract me with upfront cash, partners have made overreaching “land grabs” for IP; sometimes claiming ownership of all future IP or demanding exclusive rights — rights that I might need in the future or that other partners might want … and give more value for. Don’t forget, you need to be their “Prince Charming” too! Otherwise, every discussion and interaction will be unbalanced and haunt you “from this day forward”!
- “Happily ever after” takes careful thought and planning. Both sides need a shared vision of ‘happily ever after’. Define it and agree to a plan for getting the deal done at the outset. Know your ultimate goal, understand your limits, but also know theirs: Are your goals, objectives and timelines aligned and complementary? Quickly assess whether you both share how the deal will get done and implemented: What is the decision-making process for you? For them? Identify the decision-makers and ensure they’re engaged in the project. Map out and agree to a timeline, including diligence, negotiations and execution of the definitive agreement. Be realistic and transparent with each other: Are there competing priorities that might interfere? Sufficient bandwidth? Tight timelines? Budget identified and secured? Don’t be afraid to ask what they see as obstacles to executing a deal. Beware of ever-shifting plans. I’ve been strung along by shifting plans — it’s a red flag for sure! Don’t be afraid to walk away. The sooner you know there’s no deal, the more time you’ll have to find the real Prince Charming.
- There’s no “magic” to “magic beans”. People will throw around jargon or, worse (my personal favorite), tell you they can’t change ‘the template’. Understand the other side’s intent — what are they trying to achieve with a given term. If you know their intent, you are freed to be creative and tailor terms to the situation — rather than just accept the ‘magic’ of the template. When I review agreements I think through the value of every term, not just to us, but also the value of us to our partner. Absolutely everything has value: an option to license, exclusivity, scope or field of use … and the one most people forget (or undervalue) time. If you ‘give’ someplace, you should be able to ‘get’ someplace else — finding balance and maintaining mutuality. Recently, we were able to gain some early concessions by explaining the reputational value to us of a joint press release with our major global pharma partner. Truly understanding what ‘happily ever after’ looks like to and the objectives of the other side will free you to think creatively and negotiate more effectively — tailoring the ‘magic template’ to the situation.
Find mutuality and people you can (maybe even enjoy!) working with to ensure success. If the vision for the future keeps changing and/or they (or you) get hung up on a specific term, then reread point 1: maybe this ain’t Prince Charming and it’s time to kiss a few more frogs…
Stephanie Hsieh is CEO/President of Meditope Biosciences, Inc., an early stage immuno-oncology company, based in Los Angeles. She is an industry veteran having enjoyed close to 30 years in biotech/biopharma. Stephanie began her career as a patent litigator, where she represented a wide range of clients from Fortune 50 companies to biotech start-ups to major academic/research institutions. Prior to taking the helm at Meditope, Ms. Hsieh worked in senior management roles, leading cross-functional teams to develop and execute business and new product strategies built heavily upon the intersection of the patent laws and regulatory landscape. She graduated Phi Beta Kappa and magna cum laude from Wellesley College, majoring in Biological Chemistry. She also holds a J.D. from Columbia Law School, graduating as a Harlan Fiske Stone Scholar, and an M.B.A. from Stanford’s Graduate School of Business.
