"If money isn't being spent, it's simply a conversation."
How to Read Customer Interest
A customer's true interest in a technology is demonstrated by the money (or monetizable resources) it spends on it. The more money spent, the greater the interest level. I like to say: without money being spent, it's simply a conversation.
The most basic interest level is exemplified by an inquiry. Many customer inquiries is an encouraging sign, but that's all it is. Despite the seeming significance of parties executing a confidentiality agreement, this too is only consistent with basic interest. The same can be said of a materials evaluation. So, what signals real interest?
Beyond Basic Interest A development agreement signifies more substantial customer interest. Under a development agreement, a customer will typically pay a technology provider to perform
product development work on its behalf. According to UCLA's Office of Intellectual Property, "an option agreement provides the (customer) a time-limited right to obtain a fully license agreement by exercising the option to obtain this license. Options are typically used in instances where a customer would like to do further research and development to evaluate the technology prior to entering into a full license agreement." Development and option agreements are expressions of meaningful customer interest as actual dollars are being spent, sometimes involving non-trivial amounts.
Licensing and or supply agreements legally define the business relationship supporting the customer's impending use of a technology. While of course, a technology provider should seek to negotiate provisions that protect his interests, the structure of such business agreements also serve to reveal the customer's commitment to the technology. For example, a well negotiated licensing or supply agreement should require the customer to guarantee minimum performance and or payment amounts to ensure its continuance. Agreements that reflect a customer's financial commitment to utilize the technology (versus simply to control it) are the truest and most accurate indicators of interest.
In Conclusion: Details will reveal the actual level of customer interest being shown in a particular technology.