Identified In The International Trade In Technology Licensing, Technology Licensing Fees And Protection Of Intellectual Property Strategy

Technology licensing is a kind of effective method to save technology development and commercialization costs and maintains the competitive advantages. So licensing business is highly increased all over the world. As for China Petrochemical Corporation (Sinopec), the vital important things of international licensing trade are the determination of calculating royalty rates and the strategies of protecting the intellectual property.The valuation of royalty rates is an inexact science that relies heavily on assumptions of future events, requires a combination of appropriate methodology and reasonable assumptions, and is the trade-offs between precision and resources constraints. The author has the creative opinion on the determination of the appropriate methods of calculating royalty rates, according to the different licensing stages. In the precommercialization stage, the appropriate method is the 25% rule or industry norm approach. In the prenegotiation stage, the evaluation is income approach. In the litigation stage, the method is lost profits. At the same time, the author analyzes the advantages and the disadvantages of every method.One core business of Sinopec license is the assessment of prenegotiation, is suitable for the method of income approach, and calculates royalty rates with fix royalty and floating royalty. The author further analyzes the various factors of deciding the typical patent technology royalty fee, based on the author's licensing experience of Sinopec technology trade negotiation in domestic and overseas.The other core business of Sinopec license is the strategies of protecting intellectual property. The article focuses on the analysis of the different characteristics of patent technology and know-how technology and makes the suggestion on the varied strategies of protecting intellectual property, when Sinopec is the licensor or licensee.