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Duration of technology licensing - Research Paper Example

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Licensing of the innovation during the usable duration of time that the producing company benefits for the technology introduces a difficult…
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Download file to see previous pages mination of the actual technology transfer charge and the actual duration of the charge, certain factors such as the type of technology, the type of industry and competitive environment contribute to the consideration of the appropriate charging method. Licensing considerations available to innovators highlight the various technology leakage impacts and the effect that the irregular transfer of the innovation has on the monopoly impact that a company enjoys in the market with several competitors. The basic assumption in the considerations is that there are many companies competing for the technology and the innovator seeks to find the most appropriate method to continue making revenue from the technology once sold (Raspudic 6).
As mentioned above, the two types of contracts widely employed in licensing innovation to companies include fixed-fee and royalty payments. Despite the fact that the two licensing contracts have several similarities, distinctions however, stand between them in various fundamental perspectives. In the fixed fee alternative, the technology owner charges a fixed fee on the product and makes it available to all competing companies on take-or-leave basis of offer. In this contract perspective, meeting the initial fixed fee implies that the company agrees the offer and effectively gives the company the rights to use the technology as a licencee. In the determination of the fixed fee, the number of companies competing to take up the offer forms an integral determinant force. The concept of royalty arrangement finds shape on the unit output analysis where the innovator charges a specific predetermined royalty fee (Raspudic 4). Licensees become beneficiaries of the technology if they meet the royalty fees. As employed in fixed-fee contracting, the number of licensees determines the amount of royalty charges.
The determination of the active duration of a license depends on the type of contract up to when the technology utility reduces to an outdated ...Download file to see next pagesRead More
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