Page 101 - Export and Trade

Legal

Licence • If you have the capability of fully exploiting it yourself,
Key legal characteristics greater returns are possible.
• Licensing involves the granting of rights to use certain
intellectual property such as patents, copyright, designs, Other considerations
know-how,businesssystemsor plantvarietyrights,in • If possible, for better control, retain the right to supply
return for royalty payments and/or upfront fees. a critical ingredient or component.
• The rights granted are normally territorial in nature
DQG DUH RIWHQ OLPLWHG WR SDUWLFXODU ¿HOGV RI XVH In-market contract manufacturing
•Typicallytherearemanyrestrictionsplaced on theway Key legal characteristics
WKHLQWHOOHFWXDOSURSHUW\LVXVHGDQGWKHUHDUHVSHFL¿F • A separate, unrelated entity is engaged to carry out
performance requirements. manufacturing in-market.
‡ ([SRUWHU VHOOV ¿QLVKHG SURGXFWV WR GLVWULEXWRUV RU
Positives UHVHOOHUV RU WKURXJK DQ DJHQW -9& ZKROO\ RZQHG
• Enables those who have developed intellectual subsidiary or branch.
property to gain a greater return on their rights than
theywouldhavebeenabletogeneratethemselves. Positives
•There areoftenconsiderablesavingsinimportduties,
Negatives shipping and cheaper in-market manufacturing costs.
‡,W¶VRIWHQGLI¿FXOW WRSROLFH UR\DOW\SD\PHQWV • Low up-front capital investment (as compared to
•Onceyouhave disclosedtechnology, it isoften HVWDEOLVKLQJ DQ LQ PDUNHW PDQXIDFWXULQJ RSHUDWLRQ
GLI¿FXOW WRSURSHUO\FRQWUROLWVIXUWKHUH[SORLWDWLRQDQG
development. Negatives
• Royalty payments can be subject to withholding taxes, • It’s harder to manage quality control from a distance.
ZKLFK DUH WD[ LQHI¿FLHQW ZKHUH WKHUH DUH QR GRXEOH WD[ • Although manufacturing locally may be cheaper,
agreements. the brand value of ‘Made in New Zealand’ cannot be

NZ Export & Trade Handbook 2018 99