Negotiation Technique - A Negotiation Commentary
Contents
This paper analyses intellectual property negotiation as a legal practice in which legal structure, economic rationality and human psychology interact. Taking as its starting point a complex technology and licensing case between two asymmetric actors, it examines how legal tools are used strategically to turn a potential infringement dispute into a regulated, long-term collaboration. The aim is not merely to give an account of the course of the negotiation, but to make visible how legal method actually operates in real time – under uncertainty, imbalance of power and information asymmetry.
The analysis is built around two parallel strands: first the settlement negotiation, in which questions of liability, risk neutralisation and economic positioning are central, and then the licence negotiation, in which control over intangible assets, remuneration models and contract architecture shape the future relationship. The paper shows how contract structuring, definitions, royalty models and governance mechanisms are not merely technical clauses, but tools for allocating power, informational advantage and future room for manoeuvre between the parties. The law emerges as a design process rather than merely the application of norms.
The contribution of the text lies in its reflexive dimension. By analysing the use of negotiation tactics such as anchoring, framing, information control and sequential structuring, it problematises the line between strategic skill and ethical responsibility. The work shows that business law negotiation always moves in a field of tension between loyalty to the client's interests, respect for the counterparty's autonomy and the broader market consequences that IP agreements may have. Legal negotiation is thereby positioned as a core competence in innovation law and as a field in which legal method, professional ethics and business strategy are inextricably intertwined.
Excerpt
The first step towards a good negotiation is knowing what you are negotiating about… Kristoffer Schollin, course director and also the lead examiner, therefore took the initiative of giving the class, made up of the various groups that were to negotiate against each other, an insight into the provisions licence agreements usually contain and the purpose behind them. In this way we already had a rough idea from the outset of the structure of the negotiation and what we would need to regulate in our agreements. It was useful to get an insight into which issues may need to be regulated, since this is otherwise something that usually only industry insight and very clear intentions on the part of experienced business leaders can give an indication of.
When we were given the case, we were told that we were a considerably smaller party than the opposing group and would therefore need to be more creative in how we handled the negotiation. This insight is something we leaned into quite heavily and it clearly affected the negotiation; whether that was negative or positive I will return to later in the text.
My group agreed that we had a high level of ambition in this negotiation exercise, which supported the group's dynamics; there were no conflicts regarding our goals for the negotiation or how much everyone was prepared to contribute to the joint work, which made the process frictionless. Most of our energy could go into planning and preparing for the meeting with the opposing group.
The case concerned a technology supplier (my group) that had developed an advanced software and hardware system, which another actor (our counterparty) both used in its business and, according to the circumstances, had partly exploited in a way that potentially constituted intellectual property infringement. This created a twofold problem: on the one hand, the parties had to resolve and regulate past conduct ("misconduct"); on the other, we realised that there were advantages in negotiating a workable licence agreement for continued use of the technology, as we saw potential to grow in a market we could not penetrate on our own.
Our initial analysis focused on separating the settlement issues from the licensing issues, since these two parts are governed by different logics. The settlement part concerned liability, compensation and future risk management, whereas the licence part concerned value, control, predictability and commercial incentives. By treating them as separate tracks, we could structure the negotiation more clearly and avoid compensation issues becoming mixed up with the licence terms. We also realised that the counterparty probably knew about our financial difficulties, and that if we presented and resolved the infringement before tackling the licence agreement, we would not need to "give in" on certain settlement points in order to gain advantages in the licence agreement, since we would in fact no longer have a concrete incentive to enter into a licence agreement (which the counterparty was aware of).
We knew that the counterparty would want to conclude an agreement on the spot, so we chose strategically to draft a proposed agreement that contained, in advance, contractual points that could serve as meeting points where we could go through the agreement together to negotiate an outcome we agreed on. This applied to both the settlement and the licence agreement. This could also give us an advantage in the negotiation, since one does not then need to argue for including clauses; rather, the burden is placed on the counterparty to argue against clauses. As the weaker party, this is a purely psychological trick to shift the burden; a skilled and experienced counterparty realises this, knows its position and is aware that it can steer the narrative. But our assessment was that our counterparty would probably not realise this and would walk into our "trap".
We also thought that if we reached a settlement before beginning the licence negotiation, we could also disarm the counterparty by saying that we had a common goal, and in that way perhaps get away with certain wordings that at first sight seem reasonable until one realises that they actually favour us more than the counterparty.
Another fundamental tactic was to overload the counterparty with points that were entirely irrelevant to us and that we could drop without a second thought, but which, by requiring time to be spent discussing them, naturally drew focus away from parts that were more important. I will return later to what these points might be.