IP transfer question

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If you want to seriously negotiate business, don't bring a lawyer. (That's just me).

I do a lot of royalty agreements. One I'm doing right now: Royalty runs out after 10,000 units are built.

Some royalty agreements don't run out. What does this guy want? There is no single formula you can apply.

A long-term royalty provides an incentive for long-term support and improvements. Suppose an improvement can increase sales or margin ... I guess it depends who you are dealing with.

It's a good idea to start with a presumption of trust and good faith. There is no agreement you can put in place that makes it worthwhile to work woth someone who lacks integrity.

Rich's face-to-face meeting suggestion is SOP.

Frank Raffaeli

Thanks, Frank! In this case, it's more likely the improvements will be coming from me, rather than from him; he's trying to get out of the business.

Have you done any agreements where the exit clause had to do with changing design? E.g., "royalties drop by 1% with each design revision" (although that particular example is too vague to be useful). Or is that just not done, in practice?

I totally agree. I need to be prepared before that meeting, though - it's hard to book time with him and he's a couple thousand miles away.

A phone call is significantly cheaper than a plane trip. And quicker than a car trip, by orders of magnitude! ;-)

I've even done business like this by email, albeit to the tune of a few hundred bucks' worth of services.

Ask your client/friend/partner how he (she?) feels about product improvements. Like, in your phone con, ask, "What if I change your design and it makes even _more_ money? How would you like to split the take on that?"

That sort of thing. Find a way to make everybody a winner, and how can you lose? (Hey - I just made that up! Is it as clever as it sounds, or is it the drugs?)

Good Luck! Rich