In the case of rehabilitation products, there are several especially important points to keep in mind as you determine whether the issuance of a license is beneficial to both parties.

• Profit motivation. The incentive for profit (for both parties) is usually sharply reduced because
  
  

  - the market tends to be narrow and the profit margin is thin
  
  

  - the amounts of royalties are likely to be minimal.
  
  

• Technical know-how. The easier the product is to make and market, the less each party will depend on the other to supply technical know-how.
  
  
• Experience in assessing costs and sales. Estimating a break-even point for profitability may be difficult in many instances if
  
  

  - neither party has a good idea of the capital requirements necessary to manufacture the product
  
  

  - the size of the market has not been established
  
  

  - the ability of the consumer to pay is clouded by third- party payer possibilities for some products.

In practical terms, licensing is not the best avenue to pursue in many cases. Licensing agreements are most often negotiated for rehabilitation products which

• represent substantial technological innovations or advancements
  
  
• have a clear edge in the marketplace
  
  

  - the product may be sold to the general population

  - the product may be "first" in the market

  - the product answers a known need in an important way

  - the product may complement an existing product line
  
  

• are patent-protected
  
  
• require a cross-over of technical expertise

Investigator

Transfer Officer

Center Director