CLP CLP Licensing Negotiations & Deal Structuring 1

Question 1

In licensing negotiations, BATNA stands for:

Accepted Answer

Best Alternative to a Negotiated Agreement

Answer

BATNA is the best outcome a party can achieve if negotiations fail, and knowing it sets the minimum acceptable deal threshold.

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

Diligence obligations require the licensee to actively develop and commercialize the IP; failure triggers a reversion right returning exclusivity or all rights to the licensor.

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

An MFL clause ensures the existing licensee automatically receives any better terms the licensor grants to future licensees in a comparable situation.

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

A term sheet summarizes the principal economic and legal terms agreed upon in negotiation, serving as the blueprint for the final license agreement.

Question 5

In a cross-license agreement, parties exchange:

Accepted Answer

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

Answer

A cross-license allows two parties to use each other's patents, which is common in industries where both hold blocking IP necessary for product development.

(CLP) Certified Licensing Professional Practice Test

(CLP) Certified Licensing Professional Practice Test

CLP CLP Licensing Negotiations & Deal Structuring 1