Best Practices in Negotiating IP Transactions

AuthorKirk Goodwin, Susan McGahan, Elizabeth Peters, Justin Sage
Published in Landslide® magazine, Volume 13, Number 4, a publication of the ABA Section of Intellectual Property Law (ABA-IPL), ©2021 by the American Bar Association. Reproduced with permission. All rights reserved.
This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
in Negotiating
IP Transactions
By Kirk Goodwin, Susan McGahan,
Elizabeth Peters, and Justin Sage
company’s intellectual property (IP) can be among
its most valuable assets. Whether it’s in-house or
outside counsel dealing with an agreement nego-
tiation or corporate transaction, IP terms should
be carefully considered. This article contains tips
and best practices to help legal counsel streamline
the agreement negotiation processes, issue spot for
risks in accepting certain IP terms, and strategically
negotiate to ensure the business goals are met.
What Impact Can Legal Counsel Have on Negotiations?
In a word: a major impact. Although the actual terms of the
agreement can depend on the business structure (for example,
the negotiations may be driven by a dedicated procurement
team in one business or a solo inventor in another), having
the legal counsel’s advice on the risks of agreeing to cer-
tain provisions during the negotiations can make or break the
opportunities for the client in both the short and long term.
Depending on multiple factors, including the extent of
daily risks the business faces and the company’s nances, the
company may have a team of in-house practitioners special-
izing in areas of the most legal risk to the company. A main
reason why a company will hire in-house legal counsel is to
have a legal mind within its walls 24/7, as opposed to direct-
ing company resources toward another type of employee
and instead retaining outside counsel to be called upon when
needed. But an even better reason to hire in-house counsel is
to have another business team member who can apply a legal
“lens” to business outcomes.
On average, the business client does not want to be told
what it cannot do—it can consult a rulebook for that itself.
The role of the legal counsel in agreement negotiations is to
help the business come up with ways to accomplish its busi-
ness goals in a legal and ethical manner. The primary benet
of in-house counsel (or outside counsel with a deep under-
standing of the business and its goals) is the counsel’s ability
to advise on an acceptable path forward that will pose the
least risks to the business while providing the greatest return.
In order to both gain that deep understanding of the busi-
ness’s goals and ensure the counsel’s advice is taken into
sincere consideration, the legal counsel must have a prover-
bial “seat at the table.”
How Do You Earn That “Seat at the Table”?
Trust is key to strengthening any relationship. In the legal
world, earning and maintaining that trust can be challeng-
ing, particularly when you, as the legal counsel, are the one
who often has to be the “downer” on certain plans of action
(e.g., when an approach is too legally risky when compared
to the rewards, or worse yet, is unknowingly illegal to begin
with). But the truly valuable legal counsel is the one who can
not only advise against plans of action that bring on more

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