Product Royalties

Hello All
I have a machine that will be built in India using Indian investors. The partnership is they will own the machine and we will own the intellectual property(patent). Our payment will be from the production count. How would I go about guarantying payment. Thoughts?
Thanks David

You hire yourself a really good contracts attorney with experience enforcing contracts in India. An Indian company and Indian investors are notably beyond the jurisdiction of Texas courts.

This is one of those situations where you can use technical means to prevent the machine from continuing to run if you are not paid, and you need to make sure the client understands and agrees to that ahead of time.

If you need suggestions on what sort of technical means there are for securing the controller, or what sort of methods can be implemented to correctly report the production counts, post some details about your control system.

+1

also, you must have a pat pending or patent for your part of the machine first.
if they beat you to the patent office, you're out of luck. it's who applies first (from business law class). I could be wrong, but better safe than sorry.

james

We do own the patent and will be using Contrologix 5000. I'm thinking that I want to disable the machine(controlled shut down) and not allowed to restart until I send a command.

simply forget it, as these indians are clever and will copy the complete machine with their own PLC.

Not all Indians are crooks just like Texans. If you have confidence in the people you are working with then you should be fine. On occasion I've been cheated by Americans and treated very well by Indians.

Remember that a patent, like a contract, is merely a license to sue. Until you have them in court or at the deposition table it doesn't help much if they are out to screw you. You do need leverage just in case, just as you would with a European firm or one from California. Ideally there should be a way you can hurt them financially if they attempt to cheat.

First, India is working hard to establish good business relationships in the US. There are many chamber of commerce type organizations from India working in the US for that purpose. Get in touch with them and ask for some guidance.

Second, follow Ken's advice and get local representation. You need boots on the ground whose financial benefit is tied to yours.