KUCTC’s main goals in any license agreement are to ensure that the technology will be developed by the licensee for public benefit, complying with federal, KU or KUMC policies, and if successful, providing a reasonable financial return to the university and the inventors of the technology.
The terms of startup licenses are flexible and take into account the financial realities of many startups as well as the particular industry in which the company will be competing.
Standard terms in a license for a KUCTC startup will include: negotiated financial terms, such as annual fees and a royalty on product sales, and reimbursement of patent costs. They may also include a minority share of equity in the startup.
The non-financial terms will include:
- Degree of exclusivity: nonexclusive, exclusive, or restricted by field of use.
- Reservation of rights for the Federal government (if appropriate), and for university and other non-profit organizations for their research and education activities.
- Performance requirements to assure that the company has resources and is capably developing the technology.
Often times KUCTC will work with startups to delay major financial payments until the company is able to raise significant capital.
EXAMPLES OF LICENSING AGREEMENTS
A simple, limited-term agreement, which gives the first right to enter negotiation for a license to a given technology. For the duration of the Option, KUCTC will not actively market the technology or seek out other potential licensees. The party receiving the option often pays a modest fee and typically assumes the responsibility for ongoing IP expenses for the duration of the option. An Option is most frequently used when a prospective licensee wants the ability to conduct due diligence on the market or technology before entering into a full license agreement.
Commercial Evaluation License
Often the diligence a prospective licensee wishes to conduct on the technology cannot be completed without access to samples or data. In this case, commercial evaluation licenses are used to grant the right to use a technology, under limited circumstance for a limited time, for evaluation.
Tangible Research Property License
IP has many forms, and inventions that are not patentable or copyrighted can still be licensed. The licensee is granted the right to use and sell the materials that were created at KU or KUMC.
The License Agreement can be tailored to suit many situations and typically represents a long-term partnership. Licenses can grant exclusive or non-exclusive rights, such as the right to make, use, and sell the technology, and they normally impose obligations on the licensee, such as the requirement to develop the technology into a product or service and to pay agreed-upon financial consideration.
We believe the key to success with a license is creating a partnership between KUCTC and the licensee around the joint interest in seeing KU and KUMC technologies realized as commercial products and services.