Dr. John D. Sanders • 843-491-6060john@johnsanders.com

Market View

John D. Sanders, Ph.D.,

"How Fast Can I Go?"

Intellectual property rights, license fees, patent protection, cooperative ventures, marketing responsibilities, contract protection: all vital issues in many agreements, and important to any laboratory or developer of a technology product or service; as they can cause a real slow down and/or bottleneck in any business deal.

In effectuating a completed agreement, the role of attorneys and accountants can be very beneficial Ñ or can really be a killer blow. Many times the nature of the question brought to these advisors is the important aspect of getting the value of experience in the answer.

For example, let's ask the question: "How far can I go in granting intellectual property rights?" There are other similar questions that might have a written definitive answer with a legal department in your organization. Don't ask the question that way. You need business advice, not a concrete definition.

An analogous question is: "How fast can I go on the Freeway?" This seems like a fair question. But, what answer would you expect from a strict legal interpretation? Of course, the answer is 65 miles an hour. Thanks a lot, I can read that. No, I mean, "how fast can I really go?" What if I'm "in a hurry"? Does the definitive speed limit give insight into your decision on speed? When does the law (or regulations) require judgmental answers and interpretations?

First of all, will 65 mph allow ample time to meet my obligations? If so, then I've probably got the margin I need to accomplish the mission. If not, however, then there are certain judgment calls that need to be made. Let's explore this analogy by probing the attorney to get experienced advice for the ultimate business decision. If I go over 65, how much faster can I go without attracting the attention of a police officer? What are the odds of a police officer even being there? How much are the various costs of tickets that result from different levels of speeding? What are the chances that I will be arrested and significantly detained by a police officer who stopped me? What are the odds that I will even lose my license and thereby have long-term negative effects?

This line of questions can continue for some length, such as: If I'm 10 minutes late, does it really matter? At what point will my tardiness begin costing more money than the cost of the speeding ticket? When will I begin to make my potential business partner concerned about my desire for promptness, and possibly kill the deal? Moreover, I have to be concerned with the safety aspects of going over the speed limit and increasing the risk to my life and limbsÑ or hurting someone else in the process.

Ultimately, all these questions have to be weighed against the value of the deal to me.

By experience, most of us have learned what our personal comfort level is in "going over the speed limit." Not everyone goes exactly 8 miles per hour over the limit, anticipating that the police only stop at 10 or above. Do you really believe that? What if the cars in front of me are doing it? "I'm only going with the flow." We also have to determine how soon we want to arrive at the destinations, and maybe even how "hot" our cars are. "Why have a 300 hp engine to go 55 mph?"

Therefore, don't ask your attorney for the speed limit unless you want the legal answer. Phrase the business problems and risk/reward considerations before you broach experienced advice. Don't put your advisor on the spot. But don't lose your customer or partner over a legal technicality unless the ramifications of being wrong are out of line and can have serious repercussions that outweigh potential rewards. Think out the business first; then ask for legal "experience."

Oh yes, watch out for the speed traps on the way to the beach.

I would appreciate comments; contact me at Technology Transfer Business magazine: phone: 703-848-2800, ext. 151; fax: 703-848-2353; e-mail: jsanders@technews.com.

prepared for the June, 1996 Issue of the Federal Laboratory Consortium NewsLink