• Maximise the strategic appropriability of returns to the IP (See Note 1=>)
  
  
• Minimise the strategic cost of licensing out technology

Licensors will consequently prefer to license to :

• Large firms capable of accessing extensive markets inaccessible to the licensor
  
• Firms capable of using the IP in a variety of valuable ways that the licensor cannot
  
• Firms in a good competitive position to maximise the added value they can capture from the IP
  
• Firms at a strategic disadvantage relative to the licensor such that the licensor is in a better position to capture value from the licensee by maximising licensing royalties.

Conversely Licensors will prefer not to license to:

• Actual or potential competitors with the learning ability to 'leapfrog' the licensor
  
• Firms at a strategic advantage relative to the licensor such that the licensee is in a better position to capture value from the licensor by minimising the licensing royalties paid
• Small or badly positioned companies with few opportunnities to exploit the IP