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Faye B. Feinstein quoted in article “When licensees go belly up: Here’s what TTOs need to know”

Technology Transfer Tactics

Below is an excerpt:

The best strategy for avoiding a bankruptcy nightmare, both attorneys advised, is to keep a very close watch on licensees, especially if you see early signs of trouble. Those signs might include missed royalty payments, lender action against the licensee, staff layoffs, or other signs of instability. Equally important, they stress, is to know what your agreement’s terms are regarding breaches, cures, and termination so you can take action in the most appropriate way. But taking action is the key, sooner than later, the attorneys said.

“We are strongly advising you to exercise your rights and remedies,” Feinstein noted. “It’s easier to terminate and substitute [the existing agreement] with something short-term.” In addition to renegotiating, short of termination it’s important to establish a specific cure period for a licensee in breach, but once that period ends, strongly consider termination before it’s too late, she adds. If you wait one day too long, “you’re stuck in bankruptcy.” But if you do terminate in time, “you tip the balance of power in your favor,” Feinstein said.

Originally published in Technology Transfer Tactics, April 2015