CLP CLP Licensing Negotiations & Deal Structuring

Question 1

In licensing negotiations, BATNA stands for:

Accepted Answer

Best Alternative to a Negotiated Agreement

Answer

Baseline Agreement Terms for New Agreements

Answer

Bilateral Arrangement for Technology and Assets

Answer

Base Amount for Total Net Assessments

Question 2

Which deal structure element allows a licensor to recapture rights if the licensee fails to meet agreed commercialization benchmarks?

Accepted Answer

Diligence obligations with reversion right

Answer

Most-favored licensee clause

Answer

Grant-back clause

Answer

Covenant not to sue

Question 3

A 'most-favored licensee' (MFL) clause in a license agreement obligates the licensor to:

Accepted Answer

Offer the same or better terms to the MFL holder if a more favorable deal is later granted to another licensee

Answer

Give the licensee first right of refusal on any sublicense

Answer

Charge the licensee the lowest royalty rate in the entire market

Answer

Provide the licensee with exclusive rights in its territory

Question 4

What is the primary purpose of a term sheet in a licensing negotiation?

Accepted Answer

To capture agreed key business terms before drafting a full binding agreement

Answer

To create a legally binding contract for immediate execution

Answer

To submit proposed royalty rates to a regulatory authority

Answer

To formally end negotiations and document areas of disagreement

Question 5

In a cross-license agreement, parties exchange:

Accepted Answer

Rights to each other's IP portfolios, typically without cash payment

Answer

Product samples for comparative testing before signing a license

Answer

Confidential technical data under mutual NDA only

Answer

Equity stakes in each other's companies

Question 6

What is a grant-back clause in a license agreement?

Accepted Answer

A provision requiring the licensee to license back to the licensor any improvements made to the licensed technology

Answer

A clause granting the licensor the right to inspect the licensee's facilities

Answer

A provision automatically renewing the license unless terminated

Answer

A right for the licensor to reclaim the IP upon bankruptcy of the licensee