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In this video, Steve emphasizes the importance of being prepared before negotiating a licensing agreement. He advises that having a well-crafted provisional patent application is crucial for gaining leverage in discussions. The application should demonstrate perceived value and include comprehensive details such as manufacturing processes, materials, workarounds, variations, and drawings. He highlights the need to write the application effectively to ensure its value is clear to potential licensors. Additionally, he mentions a program called Smart IP that teaches how to create a successful provisional patent application.