[Editor] What is license trade? Licensing trade is the most common form of international technology trade, also known as "licensing trade", which means that the technology seller sells the right to use the technology subject matter to the technology recipient in the form of licensing agreement or contract. [Edit] Type of license transaction
Exclusive license. It means that the licensee enjoys the exclusive right to use the technology under the license agreement within a certain period of time and in the following areas, and the licensor does not use the technology in this time and area, nor does it transfer the technology to a third party.
Exclusive license. It means that the licensor can continue to use the technology under the license agreement for a certain period of time and in a certain area, but the licensor may not transfer the technology to a third party.
General permission. It means that in a fixed period and in a certain area, the licensor can not only continue to use it by itself, but also transfer the technology under the license agreement to the second party for use and to the third party.
Exchange permits. It means that the two parties to a technology transaction exchange their respective technology use rights through a license agreement, and generally do not charge fees.
Transferable license. Sub-licensing, also known as sub-licensing, is a special type of technology trade, which means that the technology recipient can also transfer his licensed technology to a third party for use.
[Editor] Advantages of License Trade
Compared with product export and direct investment, license trade has unique advantages:
(1), as a form of product export conversion, is the best way to avoid the restrictions of importing countries.
(2) It can greatly reduce or avoid various risks in international marketing. For example, the recipient's funds did not enter the international market, which reduced the risk of foreign exchange control in the recipient's country; Pure technology license, there is no political risk that the sole proprietorship or joint venture will be confiscated and requisitioned by the host country; The recipient uses technology to carry out production and marketing activities, so that risks such as market competition and exchange rate changes are transferred to the recipient.
(3) It can save high transportation and marketing expenses and improve price competitiveness.
(4) It is beneficial to the transfer of special technology. Some important industrial products related to the national economy and people's livelihood of importing countries cannot be invested or exported, but they can successfully participate in the production and operation of these products through license trade.
(5) It is convenient for service enterprises to enter the international market. For example, various consulting companies, technical service companies and other enterprises do not manufacture products themselves, so license trade provides convenient conditions for their intangible products (technologies) to enter the international market.
(6) enable small manufacturing enterprises to enter the international market. This advantage is particularly important for many domestic manufacturing enterprises.
[Editor] Disadvantages of License Trade
Small manufacturing enterprises lack strength and funds, and it is difficult to use direct investment to produce and operate products abroad. However, as long as you have a technology that is attractive to the market, you can also enter the international market through license trade. Objectively evaluating the licensing trade model, it also has some shortcomings:
(1) must meet certain conditions. Not all enterprises and technologies can conduct licensing transactions. Only when enterprises have well-known trademarks, good goodwill, advanced technology and are attractive to recipients can licensing trade become a reality.
(2) It is difficult for Licensor to control the market operation of the target country. The two parties to the license transaction are not subordinate, but equal buying and selling relations. No matter how the licensee's market operates, the licensor cannot directly control it. At best, it can only regard the licensee as its own distributor abroad. Bad market operation may adversely affect the reputation of the licensee and its products.
(3) The recipient's net income may be limited by the operating conditions of the target country. When the transfer fee is calculated by royalty, the net income of the transferee will be determined by the competitiveness, sales volume and profitability of the product in the target country.
(4) Licensor may have cultivated its own competitors in the international market. In fact, licensing trade means that the licensor transfers some technical advantages and exclusive rights to the licensee, and in the final analysis, it gives up some real and potential markets, which is the risk loss of the licensor. Therefore, before technology export, we should weigh the pros and cons, estimate the risk loss, formulate remedial measures, and then make a decision.
[Editor] Profitability Analysis of License Trade
Production enterprises choose license trade to enter the international market, mainly because their expected profit level is higher than other entry methods. Therefore, it is necessary to analyze the profitability. During the validity period of the agreement, the increase of licensed trade income MINUS the increase of cost is the profit income of the trade. Among them, the increased income depends on the sales potential of the licensee, because when the royalty is obtained according to the sales volume, it must be related to and proportional to the sales volume of the licensed products, which requires the licensor (licensee) to study the foreign target market and evaluate the licensee's ability to sell the licensed products in the target market. At the same time, Licensor needs to determine and evaluate the following income: the entry fee (including the publicity fee) for technology transfer; Technical assistance fee; Engineering and construction costs; Shares of the holder's enterprise; Stock dividend; Profits from selling (machinery, equipment, raw materials, semi-finished products and other products containing non-licensed contents) to the licensee; Commission when buying and selling the products of the licensee; Rent paid to machinery or equipment owned by Licensor; Management fee; Fees for patents, know-how and trademarks collected from the licensee (the part paid by the transfer), and commissions that may be saved by the licensee's independent development of technology, etc. All expenses incurred by Licensor in transferring technology and related services to future Licensee within the validity period of this Agreement include:
(1) opportunity cost. The opportunity cost here refers to the income given up by the production enterprise when it conducts the expected license trading activities. These include: the actual and future net income that may be lost by entering the target country through other channels; May lose the net income of the third country market due to the export of the holder; The possible net income due to the fact that Licensor must stop the export sales of licensed products in the target country. Of course, the opportunity cost should not be overestimated, but it would be wrong not to evaluate the opportunity cost, because it is obvious that license trade will lose some income in the international market.
② Starting cost. Refers to all the transfer expenses required by Licensor to start licensing trade activities and enable Licensee to put into production and sales of licensed products. The start-up period is generally one to two years. Usually, Licensor will require a one-time or installment payment for the start-up fee. This part of the expenses mainly includes: investigation and research on the target market; Select the holder; Obtain legal protection of patents and trademarks in the local area; Negotiate licensing trade agreements, prepare and deliver blueprints, drawings and other documents, and provide technologies suitable for licensees; Training the technical personnel of the holder; Engineering, construction and factory arrangement services; Machines, equipment and raw materials provided to the holder.
③ Operating costs. Refers to the total cost of licensor's continuous implementation of the license trade agreement with the goal of profit within the validity period. Specifically, it includes: regular training for the holder; Maintain local patent and trademark protection (including paying annual fees, management and litigation fees); Quality supervision and testing, auditing and inspection; Sales, procurement and other technical services; Management help; Cooperation with the holder; Settlement of disputes; Maintain the stability of Licensor members.
[Editor] Problems in the Development of License Trade [1]
The introduction of technical software is tied up with China's technical research, and efforts are made to introduce it purposefully and selectively to speed up the process of digestion and absorption, which not only gives full play to China's technological advantages, but also cultivates its own talents.
Drawing lessons from the production organization forms of developed countries and combining the specific conditions of enterprises, introducing advanced technology and modern management science will help to break the traditional management mode and improve the management level of enterprises. In order to help enterprises better digest, absorb and innovate imported technologies, the state should provide necessary support policies and effective measures:
(1) First of all, we should solve the source of funds in many ways, so that the innovation of digestion and absorption can be fully guaranteed. The state or local government should appropriately allocate some special funds to support the introduction, digestion and innovation of key projects. At the same time, it is necessary to establish special foreign exchange to solve the foreign exchange sources needed for the second introduction, digestion and absorption. Enterprises should also adopt different forms of financing according to their own conditions, and financial departments should also support enterprises at preferential interest rates, actively provide entrepreneurial loans for enterprises and help enterprises develop new technologies.
(2) Use economic leverage to formulate policies and measures to mobilize the enthusiasm of enterprises to digest and absorb innovation. For the achievements made through digestion and absorption after technology introduction, you can apply for a technical progress award or a patent, and the researchers who have made significant contributions to digestion and absorption will be rewarded in terms of professional titles and wages; Enterprises that realize large-scale export after digestion and absorption of imported technology are given preferential policies to appropriately increase the proportion of foreign exchange retention.
(3) Establish a management organization to promote technology introduction, digestion, absorption and innovation, formulate special policies, strengthen tracking and monitoring, and promote successful experiences in a timely manner.
[Editor] Development Direction of License Trade [1]
The development direction of China's license trade is technology export. Now many developing countries are facing the adjustment of industrial structure, thus forming a larger technology market. China has initially established a comprehensive industrial and agricultural production system with a certain scale, and has the ability to provide developing countries with innovative technologies. Therefore, China should make full use of the favorable conditions at home and abroad, skillfully use the licensing trade model, vigorously promote technology export, and make the model of "technology introduction, product export, digestion and absorption, technology export" a successful way for China to introduce technology.