Chapter 4 - Your Win-Win Negotiations

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The Hon. Member disagrees. I can hear him shaking his head.

Pierre Trudeau

When the word "negotiation" flashes through your mind, do you stiffen up, prepare yourself for a battle, or turn verbally aggressive? Or, do you think debate, persuasion, and understanding various perspectives in any given situation? How you approach a negotiation will invariably have an effect on its outcome, and any long term relationship with the other party with whom you are negotiating. Entering a negotiation with a friendly, positive attitude will start you off on the right foot. Although it may be difficult at first, you will soon see that negotiation is about discussing what makes sense to both parties and finding a compromise to satisfy both parties — a win-win situation.

Is a Win-Win Negotiation Idealistic?

Yes! However, that is no reason to avoid thinking in that manner. Throughout the licensing process, both parties should keep in mind that the licence they sign should be a "win-win" situation. Although at times, it may seem like each party has opposite interests, they are both aiming towards the same goal — fair access at a fair fee. Idealistic as this may sound, it is helpful to keep this at the back of your mind throughout the process.

What Does Negotiation Mean?

In simple terms, a negotiation is a discussion between at least two parties that leads to an outcome of a certain issue. In digital licensing, it means a discussion between a content owner and user of that content that leads to a set of mutually agreed upon terms and conditions relating to the use of specific content. The dictionary Footnote 3 meaning of negotiation is:

  1. Mutual discussions and arrangement of the terms of a transaction or agreement. The negotiation of a treaty.
  2. The act or process of negotiating.
  3. An instance or the result of negotiating.

Understanding Two Perspectives

Preparation of your frame of mind is an important initial task in any negotiation. The content owner and licensee have the same ultimate goals. You both want a relationship in which the content owner is fairly compensated for the use of their content while the licensee has the right to use that content in the manner necessary for its situation. By developing alternatives and being flexible, you may find that there is a way for both parties to reach its goals.

When Are Licences Negotiable?

There are both negotiable and non-negotiable licences. For instance, the licences that accompany store-bought or online-purchased computer software are usually non-negotiable. Store-bought software comes with what we call "shrinkwrap" licences, and online-purchased software comes with "clickwrap” or "Webwrap" licences (the licence we agree to before downloading software off the Internet.) Non-negotiable means that if you do not agree to the terms and conditions of use, then you must either return the software to the distributor, or in the case of online software, you do not download the software.

Non-negotiable licences may apply to any type of content including electronic reports, periodicals and databases. Although non-negotiable licences appear to be non-negotiable, there are many instances where you may be able to change certain terms and conditions in the licence. If you are faced with a licence that seems non-negotiable, and you would like to license that particular content, always let the content owner know your position and see whether they are willing to discuss alternative terms and conditions of licensing. Sometimes asking the simple question, "Is there any room for negotiating?" may result in a pleasant outcome.

Keep Doors Open

You never want to threaten any points and close doors to discussion. However, you may keep at the back of your mind that this is not the only arrangement available. If you are a licensee, you may be able to find comparable content to license. If your museum is acting as a licensor, you may find that there may be plenty of others interested in licensing your content. You should never feel obligated to enter into an agreement that does not work for you.

If as a licensee, you find yourself in a situation where your museum cannot live with the demands of the licence but you really do want access to that particular content, contact the content owner or distributor and discuss with them the possibility of changing some of the terms and conditions. The best approach would be to say that you really want to enter into a licence to access that particular content however you need some amendments to the licence offered to you, otherwise you would not be able to fully benefit from the content.

Letter and Email Agreements

Is it necessary to have a formal agreement for each licensed piece of content? No, in some situations, a short letter or email setting out what content is being licensed and how it may be used may make more sense. Again, this may be negotiable if one of the parties communicates to the other one that certain terms and conditions in the letter or email do not meet its needs.

Oral Agreements

Whether you are a content owner or licensee, it is best to have some sort of agreement or confirmation of your understanding concerning the use of the content, in writing.

Although it is less frequent, there could be instances where the content owner will not provide you with any written licence or documentation setting out how you may use the content. In such a case, you may either request that they put something in writing or alternatively that you or your lawyers draft something for review by the content owner. If the content owner insists on oral permission, send them a fax, an email or a snail mail letter setting out a summary of your telephone conversation and the agreed upon terms and conditions of use of the content. That way you will have some record of the conversation should you or another person in your museum later need to refer to it. Make sure that your museum has a good system in place to track such correspondence.

Negotiable Licences

Certain products like a costly electronic database, or an online subscription to a journal, may require the negotiation of specific terms and conditions of use to match your needs. Through your discussions and negotiations with the owner of the content (e.g. publisher of the database or online journal), the owner and yourself will negotiate and agree upon exactly the terms and conditions under which the content can be used. How do you ensure that you obtain the best possible terms and the ones that meet your needs and the needs of your museum? How do you negotiate to obtain those terms and conditions?

Tips on Negotiations

Below are some tips for negotiating licence agreements. There are two sections: Before You Begin Negotiations and During Negotiations.

These same negotiation tips apply to licensors and licensees and to a variety of licences relating to individual works such as a photograph to be posted on a Web site, or relating to larger collections of works such as an entire database of works or an electronic journal.

Before You Begin Negotiations

Include the Future Today

One thing to keep in mind when negotiating licences is that the uses you negotiate today may not exist in the future, and that future uses of the content may be in digital venues and with technology not foreseen at the time of the negotiation of your licence. For example, five years ago, you may have obtained the rights to post certain images on your museum’s Web site. Now you also want to post those images on your museum’s Facebook page. (In this situation, you would have to return to the wording of your licence and see whether use was specific to your Web site or allows more general use in your online presence.) Obviously, you cannot predict all your future uses. Still, you must keep the future in mind throughout the process. Where possible, ask for shorter term licences that cover broader media that may not currently be in existence. Be realistic and set strategies and goals that are flexible and relatively easy to change over time.

Your Negotiating Philosophy

It is important that any negotiating strategy include a "negotiating philosophy". That is, how is the team of negotiators going to approach each negotiation. Is the team looking to "win" each negotiation? Or, is the team looking to build relationships with licensors and licensees with whom it enters into agreements? Will you take the hard line, or will you be interested in the other party's perspective, and try to ensure that each party is satisfied with the end result of the negotiation?

Be Prepared

Be prepared by having all the information you need. What do you want from the other party? Know specifically the nature of the content and how it will be used. It is a good idea to talk to others in your museum to see how certain content will be used – will the DVD content be placed on six or eight computers? Will access to the online database be permitted only to staff, or will the general public also have access to the database? Will access be permitted off the museum's premises, and how about in other states or countries? With the rise of distance education as an alternative method of delivering university education you may need to take into account that many of your users may be in other countries. Does the licence permit distance education uses of the licensed content? Who will be using the content and what they will be doing with this material? Will content be downloaded from your Web site? Will images be shared on a flickr page? If your museum owns the content and is licensing it to others, get the answers to the same questions about the intended uses of the licensed content. In sum, when negotiating with a licensor or licensee, discuss who will be allowed to use the material, how it can be used and what happens in the case of unauthorized use.

If applicable, examine the sorts of terms and conditions you entered into last time with this licensor or licensee. How about terms and conditions in previous licences with other parties? Were those effective agreements or did they cause problems? For instance, under your previous agreements, were you only able to make a single copy of an article from an online journal or were you able to make class sets of 100 for an art lecture at your museum? Are there alternatives you can think of that might be satisfactory to both parties? Is either party limited by a specific deadline or timeframe?

Are you confident in your negotiating skills? If not, read up on negotiation or take a course on negotiation. Do a mock negotiation with others in your museum. You will be most confident when you have knowledge of your situation and also knowledge of the other side's situation. Be comfortable with your negotiating skills.

As part of your preparation, examine the process of negotiating, and previous negotiations in which you have been involved. Did they work out? Were you happy with the results? How about the other party? Were the negotiations fair and friendly? Were you prepared during the negotiations? What would you have done differently? Go through various scenarios of licensing clauses and ask yourself what if the other party asks for this, then we will do that, etc.

Also, this is a good time to brush up on your knowledge of various digital possibilities. For example, if you, as a licensor, are posting content on YouTube, or your licensee is, take some time to understand how YouTube works. Can content only be viewed from the YouTube site? Can the content be saved on storage mechanisms shared with others, and can it be modified? What if someone shows your museum’s YouTube video as part of a presentation? You must be aware of the rights involved and the possible uses of the content you license.

Know What You Need

There is a difference between what you want and what you need. You may want a Lexus but you need transportation of some sort. If someone offers you the Lexus at a price you can afford, then go for it. But will that really happen? If someone offers you a good deal on a Hyundai, be reasonable.

As a licensor, ask yourself what you want to gain from licensing your content. Is it just monetary compensation? What about sharing your collection? Will a particular licence help increase your reputation as a museum? Will it help promote and market your collections? Will it help increase your membership? When you consider social networking sites, carefully examine and plan your presence. With all the competition on these sites, you want yours to stick out and be frequently visited, and you want to ensure any re-uses of your content fits within your digital licensing strategy.

As a licensee, you must ask yourself how you will be using this particular content in your museum. Are you aware of your staff's and researchers' needs? How will you go about ensuring that these needs are met in your agreement? As set out in Chapter 2, it is helpful, and perhaps essential, to put any legal agreement aside, and to write a list of all the things that you might do with the journal or database. For instance, will you need to negotiate rights to print out certain parts of it, or email parts of it to yourself or to colleagues, or perhaps to copy it to an external hard drive?

Know What You Want

Do not just toss items or clauses from the licence to be agreeable. Negotiate those items you do not require for ones you do need. Know what you can give up-for the right price. Always go to the negotiating table with a few items that you are willing to toss away altogether. They are called bargaining chips. They can be used to get something in return.

Remember the difference between what you want and what you need. For instance, are you willing to be flexible with the delivery of the content, or is this unacceptable for what you plan on doing with the content? If you toss out one of these "want" items in exchange for a break on a "need" item, then you are ahead of the game.

Be prepared that you may not reach an agreement. Develop a set of alternatives for yourself. Is there someone else with whom you could enter into an arrangement? How important is the particular content being discussed to the museum? You want to know your options and have an alternative plan should the negotiations come to a standstill or fail.

Write down your goals so you do not get lost in the moment of the negotiation. Know what you want and need.

Know your Price

Know your price! How much are you willing to accept, or to pay, to license the materials? How does your budget accommodate this? Is the budget flexible? What are you willing to give up and at what price? And remember that all content posted on social networking sites is available for certain uses for free; is that part of your overall licensing strategy?

Who Represents your Museum?

Designate a person from your museum to lead the negotiations. If your lawyer is negotiating the licence, make sure a designated person from your museum is a part of all of the negotiations. Your staff will likely need to educate the lawyer about business activities and priorities, and the use of digital content. This person may possibly lead the negotiation, engaging the lawyer more as a sounding board.

It is important that a single person is designated from your museum, and is a key part of the negotiation process from the beginning to end. Changing your lead negotiator part way through the negotiation can lead to a waste of time and money, can be frustrating to both parties and can lead to inconsistent negotiations. If you are negotiating as a team, make sure the team will proceed with the negotiation from beginning to end. Likewise, ask the content owner whether its representative will be the one negotiating the licence and insist that once this representative is selected that he or she will remain the negotiator throughout the process.

Sometimes, there is a negotiating team with people from different areas in the museum, who may contribute alternative and helpful views. Whether you have a single negotiator or a negotiating team, try to include people who are confident in their work and skills and who are able to put their ego aside in order to find the best licence for your situation. You need a team you trust, and one that the other side will also trust.

Who is Representing the Other Party?

Before you begin negotiations, ask who will be representing the other party. Ask for their names and position titles and a brief description of their roles at the organization with whom you are negotiating. Do you understand their perspectives vis-à-vis the negotiation? Have respect for these people as this negotiation may the beginning of many more negotiations. Never assume you have the upper hand, and never underestimate the other party.

Plan, Plan. . . but be Flexible

Plan your negotiations-decide when, where, who and how. Setting the stage is important — even how the furniture is arranged can set the tone for the negotiations. For instance, one party sitting behind a big desk and the other party on the other side of it sets a much different tone from negotiating at a round table. Pick a place where you feel comfortable. If you feel better negotiating in your own office, choose this as the setting. If negotiations will take place in another setting, be sure to arrive fifteen minutes before your meeting. Get used to the surroundings. If you feel more comfortable with a mediator of some sort or an advisor, let the other party know this, and arrange for one.

Negotiations need not take place in person, and may be done over the telephone or via email.

Most people prefer full concentration on the negotiation at hand. That means no phone calls, texting, etc. That is something you may need to discuss with the other side prior to beginning negotiations, to ensure the environment is conducive to all.

Notwithstanding all of your planning, you may need to be flexible. In fact, you need to plan to be flexible! As you proceed through the negotiations, you may learn things that change your perspective. Do not let this halt your negotiations, however do ask for more time or a break so you may research any developments, or consult with others at your museum. Also, negotiating is not scientific or like a chess game — if he moves this piece, then I'll move that piece. It takes a lot of preparedness, patience, and the ability to be flexible and creative when things go differently than planned.

Try to Understand the Other Party

Know the party on the other side. This does not necessarily mean personally (although finding some common personal interests may make the negotiations friendlier). Know the individual or organization with whom you are dealing. Have some idea of its background, its financial situation, where its interests lie. What is the current and future plans for the other party’s online presence? Does the organization want to expand into a certain market or create a reputation in a certain area? Can you be the door that the company uses to achieve those goals? If you are, then that may be one bargaining chip right there.

Be sure that you are negotiating with the appropriate party. Negotiating with someone who has no real power in the organization or who cannot make the decisions you are asking them to make is a waste of time. Find out who the decision-makers are and talk to them.

If you are the licensee, make sure the party does indeed have ownership of the materials you want to license from them, or that they have secured permissions from other copyright owners if necessary. If you are suspicious that the content owner may not in fact own the rights they are purporting to license to you, do not go any further. You should be comfortable that the content owner does in fact have legal authority to provide you with the rights set out in the license. A warranty clause in the licence should reflect your comfort and not your suspicion. Likewise, if you are the licensor, be upfront in offering the other party a warranty clause concerning ownership of the appropriate rights.

During the Negotiations

Listen Carefully and Actively

Take in everything during the negotiations. The opposing party could provide you with valuable information that you can use to your advantage. If you are unsure about something, ask for clarification so that there are no misunderstandings. Also, be sure that you understand exactly what it is you are hearing. Do not read something into what you are hearing and do not fill in gaps. Likewise, be careful not to miss anything that could turn out to be crucial.

Find Areas of Mutual Agreement

At the beginning of a negotiation it may seem like you are miles from a successful agreement. One positive way of beginning a negotiation is to start with the points upon which you agree. This can create a positive beginning to your discussions and create momentum to deal with more tricky areas.

Ask Open-Ended Questions

"Yes" or "no" answers tell you very little. You need information and clues as to where the negotiations are heading. Ask open-ended questions to get the other side to talk. Some individuals may be uncomfortable negotiating at all. If you are unable to get answers from the other party, perhaps changing the subject might be a good idea. For instance, if the other party is an artist, talking about the latest art exhibit might be a good way to get her or him to open up and then negotiations can proceed.

Never Assume Anything

If you are unsure about what you just heard--ask them to repeat it. If something appears to be missing, ask them why. It bears repeating--do not fill in gaps or read items into a statement that are not there. For example, if the other party says he wants to monitor how his content is used, ask for clarification on how this is to be done and what sort of time and costs are involved. It is important to think in the long term about these issues. Being clear on these points will strengthen your licence agreement by making it easier to ensure compliance to its terms once the content is in use.

Be Assertive-Not Aggressive

You have a right to expect co-operation in negotiations. You have a right to ask for items on your "want" and "need" list. But you do not have a right to bully. Aggression is not negotiation. Aggression will rarely get you anywhere--if anything it may cause the other party to walk away from the table entirely, realizing that you as a customer or partner are more trouble than you are worth. Do not be too dogmatic about your position-you are there to negotiate.

Communicate

You are there as a representative of your museum and do not have a personal stake in this negotiation. Do not compromise your own values and beliefs during the process. You are negotiating over a product, not a personality. Do not use doubletalk or veiled allusions in an attempt to stymie the other party. If you do have a personal stake in it, you might want a more objective person to conduct the negotiations on your behalf.

Some believe that it is not necessary to be overly vocal during negotiations. Some prefer to concentrate on listening to the other side, rather than speaking a lot. Some believe that it is best not to begin discussions but to let the other party take the lead. If you do go first, you may want to start off with a positive offer, then be prepared to change it if necessary.

Keep a Record

Taking notes during negotiations is very important, particularly when the written agreement is presented for your approval. If something is missing or misrepresented, then it is far easier to refer to your notes and bring it and them to the attention of the other party.

Also, frequently check the notes you made while preparing for the negotiations. Make sure you are on track with your goals, and needs.

Date all of your notes so that they provide a chronology of your discussions.

Keep in mind that any notes taken before, during and after negotiations are not legally binding and everything to which you agree should be clearly stated in the licence.

Body Language

If the negotiation takes place in person, watch their, and your own, body language. If on the phone, "listen" for intonations, and if by fax or email, look for any helpful signs in the language used to communicate.

Clear Up Any Misunderstandings

Negotiations commence and continue under an aura of trust. Part of that trust involves keeping the other party's goodwill. It is possible that innocent misunderstandings can destroy that aura of trust and finish your negotiations before they even get off the ground. Do not let misunderstandings get in the way of negotiations. Admitting that there was a misunderstanding is not a sign of weakness. Be honest. Do not bluff unless you definitely mean it. Bluffing does have its uses but be prepared to carry through on the bluff if the other party calls it. If your negotiations include discussions of licensing terms and conditions with which you are unfamiliar, take time to consult a lawyer or colleagues.

Know When to Take a Break

Take some time during negotiations if things appear to be getting too heated. Take time if you have just been given a great deal of information to absorb. Take time if you need to consult with someone else. Ideas can come to you in the middle of negotiations for which you need approval before acting on them. The other party may toss out something on an unrelated matter that gives you some additional insight. Most importantly, take some time to think over the deal before closing it.

Sometimes both parties need time to get a clear mind and see the bigger picture. Sometimes it is helpful to take a break to review the points on which you do agree. This can help show each party how close you are to an actual deal. It may also remind both parties why the arrangement is a good idea, and provide momentum to finish the negotiations.

Stalemate

Sometimes it may feel like your discussions are going in circles and that you will never conclude the negotiation. If taking a break does not cure the situation, consider changing the physical location you are in. You may also find it help to have a professional mediator assist you in the process. In more extreme situations, you may choose to change negotiators (though this has its problems too).

Know When to Walk Away

Lastly, know when to walk away — and do it. Do not be afraid to walk away from the negotiations if the negotiations are going nowhere. If you are not reaching your goals, then further negotiations are a waste of your time and theirs. Sometimes minds just cannot meet in the middle. Your time would be far better spent looking for another party with whom you may be better suited for a licensing arrangement. Now is the time to consider the alternatives to your negotiated agreement.

Who Should be at the Table?

Museum Staff as Driver of Negotiation

For museum staff, the licence negotiation process is an opportunity to determine and define what uses of the licensed content will be permissible under what terms and conditions. Even if a lawyer is negotiating a licence on your behalf, it is important for you to be involved in the negotiation process so your lawyer fully understands your needs and priorities. You do not want your lawyer to merely approach this as a legal challenge. Licence agreement negotiations are also a business, strategic and practical challenge that affects the daily functioning and longer term goals of your museum. You must keep in mind that you are a dominant voice or advocate for the rights of your museum. You are aware of how content is used in your museum and by whom – key points in any licence agreement. Your licensing agreement policy must reflect these and other important issues to take into account during your negotiations.

The Role of a Lawyer

In an ideal world (or at least in the ideal world of a lawyer!), every licence agreement would be negotiated and drafted by and with the help of a lawyer. However, the reality in the museum community is that museum staff are often the ones who negotiate and even draft these agreements, and who must interpret them. Why? Because of the novelty of licence agreements, there are relatively few lawyers who are experts in this area, and in fact, there may be more museum professionals who are experienced with these agreements than lawyers. Often, the agreements are time-sensitive, and the museum may not have the luxury to wait until their lawyer has had the opportunity to review the agreement. Immediate access to the content being licensed is sometimes necessary. Lawyers can be expensive, something not every museum can afford. In addition, many institutions who do have in-house lawyers find that their lawyers can only provide general help and that the museum staff must negotiate the specifics of the licence. It is often best to use the lawyer as a sounding board and reviewer of the draft licence, while museum staff does the negotiation. Thus, there is a great need for museum staff to become more experienced in interpreting and negotiating licences, as well as managing them.

If you do consult with a lawyer at any stage during the negotiation process, keep in mind that his or her role is to advise you on legal issues, lower your legal risks, and interpret contract language. In general, you should not expect your lawyer to make important business decisions which are part of your Digital Licensing Policy and strategy, and your IP Policy. For example, a lawyer may advise on issues such as what happens if the content is not available throughout the duration of the licence, in what situations is the museum responsible for illegal uses of the licensed content, and what is the museum’s liability if it violates the terms and conditions of the licence. Note that the lawyer does not eliminate all risks, since each licensing arrangement has some risks to which your museum may be exposed. Lowering the amount or gravity of your risks, and being able to work within them, is part of the licensing process.

Whether or not a lawyer is helping you with the negotiations, you should request that the agreement be in layperson's language. This will ensure you understand what is being negotiated, but it will also help your museum to interpret and apply the licence.

Your Art

Negotiation is an art within yourself. It will be well worth your time to increase your negotiation skills until you feel confident with them. Understand negotiations, be prepared, and follow your licensing agreement policy.

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