In order to license University technology, the following items must be addressed:
- Sublicensing Rights
- Diligence Milestones
- Type of License — exclusive or non-exclusive
- Fields of Use — Licenses may be negotiated exclusively by field of use.
- Up-Front Fee — Most licenses require an intial up-front cash payment.
- Patent Costs — The University usually requires reimbursement for all existing and future patent costs for an exclusive license.
- Royalty Rate Structure — Royalty is usually calculated as a percentage of gross sales of patented products less defined allowable costs. Royalty rates can vary considerably.
- Annual Minimum Royalty — Minimum annual payment, to the University, irrespective of commercial success of the licensee.
- Equity — Companies offering an equity position are required to execute a Stock Restriction and Registration Rights Agreement and a Stock Purchase Agreement.
In general, exclusive license agreements are more stringent than non-exclusive licenses.
A sample license agreement can be obtained from OTMIR.
Last Updated: April 13, 2017