Organisations are increasingly under pressure to use fewer people to do more work. Licensing departments are no exception.

There is a tendency for licensing activity to be concentrated on the prospecting, negotiation and signing phases of licensing and a temptation for the follow up phase to be neglected until it is too late to do anything about problems which may only begin to surface later on.

In the same way that marketing and accounting departments carry out active account management, licensing departments need to have a program for active management of licenses. This can involve :

Record keeping

• Preserving records
• Ensuring accounting and audit information is up to date
  to avoid over or underpayments - correcting even simple good faith mistakes by the licensee's accountants can often repay the costs of the entire follow-up process.
• ensuring that any overdue royalty payments are followed up and paid promptly

Taking an active interest in the other party's activities. This will :

• discourage any thought that infringements of the terms of the licence 'won't be noticed'
• keep you aware of the strategic opportunity or threat a licensee/licensor represents
• help keep you aware of other learning opportunities
• pre-empt problems due to bankruptcy of your licensee/licensor
• identify opportunities for maximising licensing income either by identifying other licensing opportunities for the same technology or other opportunities for licensees to exploit.

Monitor the terms of the agreement against the situation they are now being applied in

• Company structures, product descriptions, the bases for royalty payments
  can all change and this may lead to advantages or disadvantages to be aware of.
• Are all options in agreements being monitored to see if either they can be abandonned early or if advance planning is going to be needed to exercise them?
• Is the way the terms relating to royalties are being interpreted acceptable and consistent with the terms of the agreement?
• If the agreement is about to end are the termination provisions going to be met?

Are covenants and obligations being met

• Licence agreements may inlcude terms which have to be complied with at some future date - have they been complied with?
• Have there been any improvements and if so are covenants regarding licences and disclosure being met? In the longer term patent searches may be useful for checking this
• Are the know-how show-how terms of the agreement being met?
• Are all patent renewal fees being paid in all relevant countries are appropriate steps being taken to maintain other IPRs involved in the agreement.
• Are conditions regarding safeguarding confidential information being adhered to?
  
  

  Being active in following up licence agreements can save money

  • early resolution of small problems avoids costly litigation about large ones
  • new revenue sources may be identified
  • existing revenue streams can be maximised