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Technology Pricing: From Principles to Strategy by Francis Bidault

By Francis Bidault

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Then we will explain the definition we have come to by taking into account the actual conditions of payment. 1 THE DIFFERENT TYPES OF REMUNERATION AND THEIR FUNCTIONS As a rule, among all the payments received by the licensor, there are only a few whose function it is to compensate for the transfer of technical information and the right to make use of it. This is due to the fact that a licensing contract usually covers several parallel and complementary services. , communication and authorisation for use) the services preceding the application of the contract on the one hand, 27 28 Technology Pricing and the services which have to be provided when the technology is made available to the licensee on the other.

In this case, the front-end payment will be wholly or partly deducted from future royalties. At least the licensor is certain to recover his costs, if the cooperation does not materialise. Disclosure Fees Before the licensing agreement is even signed, it has usually been necessary to provide the potential licensee with a minimum amount of technical and commercial information, in order to convince him of the benefit to be gained from the transaction. This obviously entails the risk that the prospect will not follow up, but will start to apply the technology using the information which has been provided.

5 Nevertheless they cannot be considered as a 'price' in the economic sense, inasmuch as they are not a necessary condition for acquiring these technologies. It is clear that the transfer of technologies may well be followed by no commercial transaction between the partners - and, conversely, that these transactions may be pursued far beyond the period of technology transfers if the two parties continue to derive benefits from them. This idea leads us to consider the factors determining the price of technologies which we will do, first from a theoretical standpoint and then by reporting on some applied research.

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