The Inventor's Bible by Ronald Louis Docie Sr

Author:Ronald Louis Docie, Sr.
Language: eng
Format: epub
Publisher: Potter/TenSpeed/Harmony
Published: 2015-09-01T04:00:00+00:00

TERRITORY

The territory clause is a significant one. Will you offer your licensee the territory of the United States, North America, the world, or some portion thereof? If your manufacturer has a strong market position in the United States and a weak position in Europe, why offer them the world? Generally you would not want to offer any greater territory than is necessary.

Europe can be a very sizable market. If several European companies control the vast majority of the European market, you would want to limit the territory of the U.S. manufacturer to the United States or North America, at least initially. You can always offer European rights later if the U.S. manufacturer performs adequately in the United States, which provides a performance incentive.

However, your manufacturer may have a strong market position in the United States and an interest in aggressively pursuing the European market. It may only deal with you by having rights to the United States and Europe. This scenario puts you in a strategic bind. I would probably select the U.S. manufacturer and offer them both U.S. and European rights. However, since your U.S. manufacturer has not yet demonstrated a substantial track record in Europe, it would be smart to carefully define performance standards and a time limitation specifically relating to European sales.

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