Royalty rates, sub licensing considerations and joint ventures.

Technology transfer agreements between universities and industrial companies usually involve royalties, sublicensing considerations and allocation of equity. This article extends the analysis of my previous one ("The Economic Sense of Royalty Rates", ewp-fin/970903)to deal with sublicensing considerations and equity allocation. The complexity of the technology transfer deal is demonstrated by utilizing a simple finacial model that calculates different combinations of royalties, sublicensing considerations and equity allocation. The tables and the calculation rules presented in this article (and the previous one) may serve as benchmarks for licensing managers .