Having a giraff!

[Four Cofffee]

12 months ago I licensed a product with a guaranteed and escalating minimum royalty years 1-3 and then a minimum thereafter of 50% of the previous years royalty.

Today the licencee sent me a cheque for about 5% of the first years agreed royalty saying they weren't able to start selling until October when they had marketed the product, and when their training was sorted for their end user, and although they have lots of interest, and have sold lots of training (no royalty for me on training), as yet they have made very few end user sales (which we didn't expect year 1)

Should I feel guilty that they are paying a royalty when they have made nothing, or rejoice in the fact I struck a decent deal as long as sales take off this year).

I think they were hoping I would just take the cheque and feel sorry for them.

[Kudos]

Assume you have a proper contract in place??

If so, tell them to stuff it as not your problem. If they don't play ball then it's the legal route I'm afraid and the only winners there are the solicitors/ barristers.

Going through something similarish...sold my technology company a few years back. Deal was 50% payment upfront then remaining 50% two years later assuming I stayed out of the industry. I did my side of the deal, they broke theirs. Currently with barristers, looking at £100k legal fees...

[V8mate]

So you're 95% down on an agreed payment?

[Four Cofffee]

V8mate said:

So you're 95% down on an agreed payment?

I think they are trying it on. I am pretty laid back and I think their business mangr interprets that as me being a soft touch: a techie inventor who knows nowt about business. He wouldn't be far wrong but I can red a contract.

The contract is crystal clear, they have invested loads in the marketing, and the business plan is still solid, so I doubt they will try to avoid payment and risk me takling the product away for breach of contract. I think they were hoping I let year 1 slip under the radar but we are not talking Mr Smith and his son, they are a large international business.

[V8mate]

Four Cofffee said:

V8mate said:

So you're 95% down on an agreed payment?

I think they are trying it on. I am pretty laid back and I think their business mangr interprets that as me being a soft touch: a techie inventor who knows nowt about business. He wouldn't be far wrong but I can red a contract.

The contract is crystal clear, they have invested loads in the marketing, and the business plan is still solid, so I doubt they will try to avoid payment and risk me takling the product away for breach of contract. I think they were hoping I let year 1 slip under the radar but we are not talking Mr Smith and his son, they are a large international business.

Then I think I would just write a simple letter back to them saying that you will generously offer them a further 14 days to provide the full balance or face determination of the contract.

[Four Cofffee]

V8mate said:

Four Cofffee said:

V8mate said:

So you're 95% down on an agreed payment?

I think they are trying it on. I am pretty laid back and I think their business mangr interprets that as me being a soft touch: a techie inventor who knows nowt about business. He wouldn't be far wrong but I can red a contract.

The contract is crystal clear, they have invested loads in the marketing, and the business plan is still solid, so I doubt they will try to avoid payment and risk me takling the product away for breach of contract. I think they were hoping I let year 1 slip under the radar but we are not talking Mr Smith and his son, they are a large international business.

Then I think I would just write a simple letter back to them saying that you will generously offer them a further 14 days to provide the full balance or face determination of the contract.

I have sent them a copy of the contract with the reklevant pafge number and a copy of the key paragraph. I suspect they will now apologise and pretebnd it was a mistake.

[Simpo Two]

Four Cofffee said:

I have sent them a copy of the contract with the reklevant pafge number

That'll throw them off the scent!

[Four Cofffee]

Simpo Two said:

Four Cofffee said:

I have sent them a copy of the contract with the reklevant pafge number

That'll throw them off the scent!

You missed: "pretebnd it was a mistake"

[JustinP1]

Four Cofffee said:

V8mate said:

Four Cofffee said:

V8mate said:

So you're 95% down on an agreed payment?

I think they are trying it on. I am pretty laid back and I think their business mangr interprets that as me being a soft touch: a techie inventor who knows nowt about business. He wouldn't be far wrong but I can red a contract.

The contract is crystal clear, they have invested loads in the marketing, and the business plan is still solid, so I doubt they will try to avoid payment and risk me takling the product away for breach of contract. I think they were hoping I let year 1 slip under the radar but we are not talking Mr Smith and his son, they are a large international business.

Then I think I would just write a simple letter back to them saying that you will generously offer them a further 14 days to provide the full balance or face determination of the contract.

I have sent them a copy of the contract with the reklevant pafge number and a copy of the key paragraph. I suspect they will now apologise and pretebnd it was a mistake.

If not, then V8 has it exactly right, I would write them a short letter letting them know that they are in breach of contract, and will be considering terminating the contract on this basis.

That should wake them up.

If that doesn't work, then speak to a good commercial solicitor. I am guessing that the amounts involved are five figures plus, therefore it is definitely work it. Terminating a contract of that size is fraught with dangers, and if it is argued that you did it unlawfully, then you could be at the wrong end of a claim for the cost of all of their investment into the deal.

[Four Cofffee]

JustinP1 said:

Four Cofffee said:

V8mate said:

Four Cofffee said:

V8mate said:

So you're 95% down on an agreed payment?

I think they are trying it on. I am pretty laid back and I think their business mangr interprets that as me being a soft touch: a techie inventor who knows nowt about business. He wouldn't be far wrong but I can red a contract.

The contract is crystal clear, they have invested loads in the marketing, and the business plan is still solid, so I doubt they will try to avoid payment and risk me takling the product away for breach of contract. I think they were hoping I let year 1 slip under the radar but we are not talking Mr Smith and his son, they are a large international business.

Then I think I would just write a simple letter back to them saying that you will generously offer them a further 14 days to provide the full balance or face determination of the contract.

I have sent them a copy of the contract with the reklevant pafge number and a copy of the key paragraph. I suspect they will now apologise and pretebnd it was a mistake.

If not, then V8 has it exactly right, I would write them a short letter letting them know that they are in breach of contract, and will be considering terminating the contract on this basis.

That should wake them up.

If that doesn't work, then speak to a good commercial solicitor. I am guessing that the amounts involved are five figures plus, therefore it is definitely work it. Terminating a contract of that size is fraught with dangers, and if it is argued that you did it unlawfully, then you could be at the wrong end of a claim for the cost of all of their investment into the deal.

I think the business manager is having a go because I had a meeting with him and one of their UK directors last week to discuss the sales and marketing under the licence, and the director menioned my guaranteed royalty so they haven't forgotten. I genuinely think he thinks I will let it go! It isn't quite a 5 figure sum but it escalates and is 5 figure by Y2 so I need to draw the line in the sand for him.

[JustinP1]

Four Cofffee said:

JustinP1 said:

Four Cofffee said:

V8mate said:

Four Cofffee said:

V8mate said:

So you're 95% down on an agreed payment?

I think they are trying it on. I am pretty laid back and I think their business mangr interprets that as me being a soft touch: a techie inventor who knows nowt about business. He wouldn't be far wrong but I can red a contract.

The contract is crystal clear, they have invested loads in the marketing, and the business plan is still solid, so I doubt they will try to avoid payment and risk me takling the product away for breach of contract. I think they were hoping I let year 1 slip under the radar but we are not talking Mr Smith and his son, they are a large international business.

Then I think I would just write a simple letter back to them saying that you will generously offer them a further 14 days to provide the full balance or face determination of the contract.

I have sent them a copy of the contract with the reklevant pafge number and a copy of the key paragraph. I suspect they will now apologise and pretebnd it was a mistake.

If not, then V8 has it exactly right, I would write them a short letter letting them know that they are in breach of contract, and will be considering terminating the contract on this basis.

That should wake them up.

If that doesn't work, then speak to a good commercial solicitor. I am guessing that the amounts involved are five figures plus, therefore it is definitely work it. Terminating a contract of that size is fraught with dangers, and if it is argued that you did it unlawfully, then you could be at the wrong end of a claim for the cost of all of their investment into the deal.

I think the business manager is having a go because I had a meeting with him and one of their UK directors last week to discuss the sales and marketing under the licence, and the director menioned my guaranteed royalty so they haven't forgotten. I genuinely think he thinks I will let it go! It isn't quite a 5 figure sum but it escalates and is 5 figure by Y2 so I need to draw the line in the sand for him.

If that is the case then, and you have face to face experience, I would just give him a call and just be polite but keep it short and sweet along the lines of 'nice try' and ask them that paying the agreed amount will simply avoid you putting the situation formally in writing and creating unpleasantness and getting exactly the same.

[Four Cofffee]

JustinP1 said:

Four Cofffee said:

JustinP1 said:

Four Cofffee said:

V8mate said:

Four Cofffee said:

V8mate said:

So you're 95% down on an agreed payment?

I think they are trying it on. I am pretty laid back and I think their business mangr interprets that as me being a soft touch: a techie inventor who knows nowt about business. He wouldn't be far wrong but I can red a contract.

The contract is crystal clear, they have invested loads in the marketing, and the business plan is still solid, so I doubt they will try to avoid payment and risk me takling the product away for breach of contract. I think they were hoping I let year 1 slip under the radar but we are not talking Mr Smith and his son, they are a large international business.

Then I think I would just write a simple letter back to them saying that you will generously offer them a further 14 days to provide the full balance or face determination of the contract.

I have sent them a copy of the contract with the reklevant pafge number and a copy of the key paragraph. I suspect they will now apologise and pretebnd it was a mistake.

If not, then V8 has it exactly right, I would write them a short letter letting them know that they are in breach of contract, and will be considering terminating the contract on this basis.

That should wake them up.

If that doesn't work, then speak to a good commercial solicitor. I am guessing that the amounts involved are five figures plus, therefore it is definitely work it. Terminating a contract of that size is fraught with dangers, and if it is argued that you did it unlawfully, then you could be at the wrong end of a claim for the cost of all of their investment into the deal.

I think the business manager is having a go because I had a meeting with him and one of their UK directors last week to discuss the sales and marketing under the licence, and the director menioned my guaranteed royalty so they haven't forgotten. I genuinely think he thinks I will let it go! It isn't quite a 5 figure sum but it escalates and is 5 figure by Y2 so I need to draw the line in the sand for him.

If that is the case then, and you have face to face experience, I would just give him a call and just be polite but keep it short and sweet along the lines of 'nice try' and ask them that paying the agreed amount will simply avoid you putting the situation formally in writing and creating unpleasantness and getting exactly the same.

I will keep you posted. His director emailed today on a different matter and obviously isn't aware of what is going on, so I will keep my powder dry.

[Four Cofffee]

Business manager ringing tomorrow having been out on the road with his director for the past 3 days.

Should be interesting.

I can only imagine he wants to negotiate a reduction for his bad decision making in agreeing to a minimum royalty,

[Four Cofffee]

Oh, our mistake, sorry.

[escargot]

Good

[SystemParanoia]

??? cliffhanger ?

[V8mate]

SystemParanoia said:

??? cliffhanger ?

I just don't get this whole thread. It's not really a discussion; more of a blog.

The OP didn't ask a question. He had decided what he was going to do anyway. And then just kept us informed of the wholly uninteresting outcome.

This is what it must be like on that ttter thing.