How To Determine Fair License Terms: No Need For Rules Of Thumb Anymore

Ralph Villiger

Ralph Villiger

Avance, Basel GmbH

aluation becomes an important issue as soon as it comes down to negotiating license terms. We need to know how much the licensed product is worth and how much we can ask or pay for it. In the licensing community several rules of thumb get applied to determine fair license terms. As an unavoidable consequence these rules of thumb generalize and simplify the actual situation and require adaptation in special cases. When using a rule of thumb for too long its original meaning gets blurred and it develops a life of its own. In this article we revisit the main principle of all business activities, value creation, and deduct a method to determine fair license terms for virtually every industry, free of out-of-date rules and prejudices.

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