Once the negotiating team has been appointed, it should start preparing for formal negotiations with the other party. This requires focusing on its own and the other party's key information, objectives and issues. Doing this before the start of formal negotiations compels the team to reflect in-depth on each issue and prevents it from later being caught by surprise or being forced to improvise positions.

The point at which they enter the process

If a licensor already has one or more licensees for a given technology, the earlier license agreement could be presented when the licensor is seeking another licensee. Usually, such a licensor has a proven technology, and existing contracts, and there will seldom be any major changes to the terms and conditions of another licence for the same technology.

Preparing the first draft

The party that prepares the first draft of a contract is commonly thought to have an advantage. That is probably true, as the first draft sets the agenda for the negotiations and places the onus on the opposing party for arguing for and justifying any substantive changes. However, the advantage is generally short-lived, because in the end both parties must be satisfied with the provisions of the agreement for a deal to be struck.

The negotiating team sets the parameters of the agreement in the planning sessions, sometimes even before any preliminary meetings. The parameters can then be refined as inputs from such meetings are received. When the required and desirable provisions have been selected and the draft has been reviewed and internally approved, it should be sent to the prospect in sufficient time for that party to review it before a first negotiation date is set.

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Negotiating Transfer of Technology