Technology Transfer

Negotiations

  

Technology Transfer Negotiations

  

By: UNIDO

Partially adapted

 
 

❸ The Negotiation Team

  

 
 

Once a preliminary agreement structure has been agreed upon, a negotiating team should be selected.

Composition

Two teams need to be assembled, the planning team and the negotiating team. The team that does the planning for the negotiation should consist of, at a minimum, the chief negotiator, a technical expert, a financial expert and a legal expert. If it is a complex deal, engineering, manufacturing and marketing personnel might also need to be involved. At times an outside consultant will be beneficial. It is the planning team's responsibility to set all the parameters for the proposed agreement so that the negotiating team has the information it needs to properly present its side to the other party.

The actual negotiating team for technology transfer agreements should be kept as small as possible. A simple patent or patent and know-how licence may only require one person from each party, the licensing executive for each.

As the complexity of the type of agreement being sought increases, the team is expanded. Many complex technology transfer agreements are handled by the licensing executive and an intellectual property attorney.

This, of course, does not preclude discussions between negotiating sessions with technical, financial, manufacturing or marketing experts. In situations where, for example, a large production line, a turnkey plant or a joint venture is being considered, the negotiations may require the presence of technical, financial and other experts. As the negotiations proceed and once they are completed, the drafts of the agreement are nearly always prepared by an attorney skilled in technology transfer agreements.

 		 

 

 
 

The team leader

The chief negotiator's role is a special one. He or she should command the respect of the other players and be articulate and patient. A company or a government makes a mistake whet it assigns this role as a matter of course to the senior official involved in the project. Instead, the person best able to deal with the particular negotiation should be named the chief negotiator. An understanding of the culture of the other party's country, the language in which the negotiations are to be held and the culture of the company itself are decided advantages for a chief negotiator.

The chief negotiator must have the character and strength to be able to control a meeting and win the respect of his own and the other party's representatives. He must have self-confidence, be able to lead and have the support of superiors. He must also be a person who thoroughly understands the subject, who is a broad-minded enough to listen to opinions different from his own and who appreciates arguments and is not offended when someone contradicts him. He must be vain, but, rather, sure of himself and not easily influenced by flattery. As well, he must have experience in the business being negotiated and, above all, must be able to make decisions when they are needed.

 

 
 

Team members

The technical expert should know the technology and must understand the technical advantages and disadvantages of what is being offered. He must have a knowledge of alternative technologies to those in the proposal and their cost. If at all possible, he should be drawn from the technical group in the planning team that analysed the original proposal.

The financial expert should be familiar with various types of financial arrangements, including potential sources and terms of both domestic and international financing. He should also be able to calculate the long-term impact of changes in interest rates, repayment periods and principal amounts of the financing being discussed, as well as the long-term financial returns and cash flows from the transaction as it is modified during the course of negotiation.

The legal expert should have experience in drafting contracts and should be knowledgeable about the terms and conditions of technology transfer agreements. If the subject matter is a project for developing country, a knowledge of technical, engineering or management service agreements may also be needed.

The legal expert's role needs to be delineated. Some companies feel such experts should take a back seat in the actual negotiating sessions as they are often sought to be too dogmatic in their approach. Others feel the opposite way, reasoning that agreements are legal documents and should be attended to by legal staff. However, whether the legal expert plays a primary or secondary role, his main duty is to structure the agreement and its specific provisions so that they reflect what the parties have agreed to orally. He must also watch for terms and conditions unfavourable to his side and must be able to detect subtle provisions that might escape the eye of the business licensing executive.

Should no suitably qualified experts be available locally, it would be worthwhile recruiting them from outside the company as consultants. The cost of a knowledgeable expert can be recognized many times over by his impact on the cost of a transaction to the acquiring party. If such an expert is retained, he should participate in both the preparation for the negotiations and the negotiations themselves.

 

 
 

Team discipline

A negotiating team should speak with one voice. Usually the lead negotiator is the main person. Other members should speak only when the principal spokesperson invites them to do so, which should be as frequently as possible to maintain team alertness and spirit. The leader should try to engage all the members of the team while maintaining his authority over the team as a whole. Experienced negotiators make a point of looking for any disagreement between the members of an opposing negotiating team and exploiting it to their advantage. Obviously, open disagreements between team members must be avoided, as should disagreements conveyed by facial expressions and body language.

 

 
 

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