Many manufacturers have standard license agreements they prefer to use. This assures them that everything they want is included. It’s like a landlord’s lease, and their lawyers can easily follow this agreement. It is more time-consuming for lawyers to work with an unfamiliar document and figure out whether all their issues are covered. On the other hand, smaller companies that do not have legal departments or do not want to spend money on outside counsel may ask you to submit a proposed agreement.

In either case, you will find that most issues are negotiable, if the manufacturer is serious about wanting to license your invention and work with you—and, conversely, if you want a deal. The more the company wants your ip, the greater its willingness to be fair and flexible.

I like to see what a company uses for its standard agreement, even if I plan on suggesting my language as the basis for the deal. This allows me to see the negotiation from the opposition’s point of view. It is to your advantage to take a moment and consider your licensee’s position. You will see what the future may hold for you, such as the licensee’s exit strategy, ways to avoid payments to you, and so on. And frequently, I find in a corporate contract terms that play to my benefit and were not in my agreement. This is a real Eureka moment. So if you can see the company’s proposed agreement, by all means, do it—in fact, ask for it. Inspecting the corporate agreement shows you quickly how fair a company is with inventors. Companies send a message through their boilerplate.

A few years ago, I was hired as a product acquisition consultant to a public company. Part of my charge was to negotiate license agreements on its behalf. I looked at the company’s standard license agreement and found numerous issues missing. When I asked the CEO if he would agree to include them he said, of course, he would but only if someone asked.

I recommended we take a proactive stance and put the clauses in before I started negotiating. I wanted to send a comforting message to the inventors. I wanted to propose an agreement I would sign with certain modifications. Furthermore, I was being paid by the hour, and it was not worth my time to hassle over issues that were givens. The CEO, an enlightened fellow, wanted to reach out to the inventing community and send the right message, so he agreed to my recommendation. I must have negotiated over 20 licenses for the company, and all went through without a hitch.