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Fees |
Payment terms may be difficult to negotiate, but not to draft. Arriving at a fair price for licensing digital materials can be a complex process, involving many variables. Among the factors to be considered are:
- the cost, if any, of converting print materials to digital format
- the cost of maintaining the database, including updating the information and servicing and maintaining any necessary hardware
- design costs and packaging
- costs of developing and maintaining software to access digital materials
- the expected volume of usage of the materials, if the licensor is providing online access
- the intrinsic value of the materials themselves (e.g, financial, cultural, aesthetic)
- the medium in which the materials are supplied (CD-ROM, digital tape, floppy disk, on-line access to remote server)
- expectations as to future need for and value of information
- the ability to substitute the digital format for hard copies of the materials with attendant savings in storage and staff
- increased ability to search and maintain digital information
- publisher's savings if print is no longer produced or distributed
Once the amount and manner of payment are agreed upon, it is essential that the contract spell out the payment method clearly and precisely. Any calculations or formulas that determine pricing should be specifically set forth, preferably in an attached schedule. Examples should be given where appropriate.
The clause should also specifically state that licensors may not unilaterally change the fee structure during the term of the agreement and should expressly provide that fee increases are to be negotiated between the parties as the term of the agreement nears expiration. Licensees must make sure that licensors can not automatically renew the agreement under a different pricing structure without first providing adequate notice to the licensee. The Licensee may not wish to have the contract "roll over" without notification or negotiation.
Go to:
· Examples of specific contract language
See also:
· Term; Renewal; Early Termination; Perpetual License.
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