One of the most important elements of a licensing agreement is the financial agreement. Payments made by the licensee to the licensee are usually made in the form of guaranteed minimum payments and royalties for sales. Royalties are generally between 6 and 10 per cent, depending on the ownership and the degree of experience and sophistication of the licensee. Not all licensees need guarantees, although some experts recommend that licensees receive as much compensation in advance as possible. In some cases, licensees use warranties as the basis for renewing a licence agreement. If the taker completes the minimum sales figures, the contract is renewed; Otherwise, the licensee has the option of terminating this relationship. Technology transfer license agreement for technology development in Indonesia, Mochtar, D.A. (2016). Social Sciences, 11 (24), 5958-5962. This paper discusses technology and its positive contribution to the economic benefits of a country through improved living standards, human dignity and civilization.
The author used Indonesia as a case study. The author informs us that each country has obtained its own technology transfer regulations, which depends on how it has made technological progress. Technology transfer should focus on a country`s economic benefits to avoid cases where some countries are still undeveloped despite technological advances. The main concern should be the technology transfer licensing agreement between the technology provider and the final recipient. Intellectual property licensing plays an important role in the economy, science and broadcasting. Business practices such as franchising, technology transfer, publication and merchandising of character depend entirely on the licensing of intellectual property. Landing licences (ownership licenses) and IP licences are sub-sectors of law resulting from the interaction between general contract laws and specific principles and laws relating to those respective assets. Pay attention to definitions. Make sure the product or process is completely and clearly described so that there is no misunderstanding about what is allowed. Most licensing agreements also deal with the issue of quality.
For example, the licensee may enter into the contract conditions that require the purchaser to provide prototypes of the product, mockups of the packaging and even occasional samples for the duration of the contract. Of course, the best form of quality control is usually achieved before the fact – by carefully checking the reputation of the licensee. Another common quality provision in licensing agreements is the method of disposing of unsold products. If stock items are sold as cheap knockoffs, this can damage the licensee`s reputation in the market. Do your due diligence before the agreement. Both parties should carefully consider the other party. Check business credits and continuous management. Ask for a degree. Visit the offices and production sites of the other company. Try to do it. Because of the legal basis they have to cover, some licensing agreements are quite lengthy and documents complex. But most of these agreements cover the same fundamentals.