One only has to make the quickest and most cursory of Google searches to see that the level of commercial activity in the graphene sector is booming. And as more and more uses for graphene are found, increasingly innovative business models are being constructed to provide a more solid foundation from which to progress and commercialise each new application.
Some of this activity is based on licensing the underlying IP for use by third parties. Others are looking to collaborate so that they can capitalise on their respective strengths so they can accelerate their development. However you plan to grow your graphene business, the deal making process may be new to you.
Unlike the vast majority of intellectual property firms, Potter Clarkson’s team includes not only patent and trade mark attorneys but also highly experienced IP solicitors. They are experts in all forms of IP focussed commercial agreements and provide strategic advice to ensure our clients’ businesses are enhanced by the robust legal framework their success depends upon.
In this series Potter Clarkson will answer some of the questions we are asked most frequently by our clients in the graphene and advanced materials sector. In this first part we start by looking at the overall deal making process and share our three top tips for structuring a deal.
1. PUT A NON-DISCLOSURE AGREEMENT (NDA) IN PLACE FROM THE START
As NDAs are so common these days, sometimes people forget to put one in place until after the negotiations have started. We trust it goes without saying this is unwise! Importantly, mutual NDAs should be considered as a positive step in discussions, providing a safe environment for both parties to speak freely around their commercial goals.
If you don’t yet have registered protection for your ideas or know-how, it will be very difficult to argue your ideas or know-how has been infringed if you disclosed the relevant information to your prospective partner or licensee without a well-drafted and specific NDA in place.
2. INVOLVE A SPECIALIST COUNSEL AT AN EARLY STAGE
We appreciate that this recommendation looks like self-interest, but it really isn’t.
The initial advice they will provide is highly likely to save you a considerable amount of time and expense in the long run, especially if you can’t ultimately strike a deal or if the deal gives rise to potentially damaging complexities later on. Most commonly these complexities stem from issues around competition or anti-trust laws or lack of clarity around the joint ownership of the IP involved.
3. AGREE NON-BINDING HEADS OF TERMS/A NON-BINDING TERM-SHEET
The parties to a proposed licence or collaboration agreement will sometimes try to negotiate their licensing or collaboration agreement having only agreed the barest outline of the supporting commercial agreement. This could prove to be a mistake.
A key benefit to having structured heads of terms are that the negotiations around these issues tend to reveal if the parties have different understandings of the basis of the deal. This is best dealt with before you start preparing a complete agreement, particularly as negotiating points of principle whilst drafting can increase the time and cost of progressing this matter or, in a worst-case scenario, your deal could collapse completely.
However, if you begin by negotiating and agreeing non-binding heads of terms covering all the fundamental commercial and practical points, you should be able to avoid these issues and ensure the drafting and conclusion of your agreement goes more smoothly.
In the next part of this series we will look at NDAs in more detail but if this blog has raised any questions that you would like to discuss with our team, please don’t hesitate to contact our specialist graphene and advanced materials team today.