The University of Georgia has joined the ranks of schools revamping their intellectual property policies to streamline and smooth the path to more industry sponsorships.
“My team, which includes Innovation Gateway — our commercialization arm — and the Office of Research Industry Engagement team, has been thinking a lot about how to eliminate any friction when it comes to working with industry,” reports David Lee, PhD, UGA’s vice president for research. “We want industry to see us as user-friendly, and this is one of the key changes we have made as a result,” says Lee, adding that the new initiative was inspired by similar programs popping up across the U.S.
The new IP terms came about as the result of “a collaboration between a number of Office of Research units, including Innovation Gateway, our Industry Engagement team, sponsored programs, legal and research communications,” Lee reports. “Prior to developing Industry Express, the team did a significant amount of benchmarking with other universities to see what worked and what didn’t. We wanted to take full advantage of other universities’ experiences.”
In fact, Lee says that while “it’s way too early to tell yet” which of the new IP licensing options will prove to be preferred by industry, he emphasizes that “experience at other institutions that have implemented somewhat similar programs suggests that industry partners very much appreciate the opportunity to choose licensing terms, even if they ultimately decide to go the traditional negotiation route after the research is completed.”
The Industry Express program now offers research sponsors three additional ways to license IP developed in the course of research collaborations. The program “makes negotiating research agreements a faster and more transparent process,” he says, “that also eliminates uncertainty about licensing costs.”
Each new option includes an exclusive license with flexibility around duration and payment terms; each also includes a defined-upfront license fee set at a percentage of the total sponsored project budget, which means companies know in advance exactly how much each project will cost. As the school’s Innovation Gateway homepage points out, the new flexibility “removes the financial uncertainty that can be associated with access to university-developed patent rights.”
Here is a brief breakdown of the three options:
Express 1: Limited-Term Exclusive License. With this option, the sponsor gets a five-year exclusive worldwide license to all inventions arising from the sponsored project in exchange for a $5,000 upfront or 5% of the total sponsored research budget, whichever is greater. There are no running royalties or annual minimums, but sponsor may not sublicense the IP. At the end of the five years, the sponsor can negotiation to extend the license rights.
Express 2: Fixed-Royalty Exclusive License. This option grants an exclusive worldwide license to all inventions arising from the sponsored project for the life of the licensed patent rights. The upfront is the same as the limited-term license — the greater of $5,000 or 5% of the total sponsored research budget – and includes a 1.5% initial base royalty on all licensed product sales. Sublicensing is allowed, and the royalty rate steps up to 2.5% on product sales over $50 million a year.
Express 3: Paid-Up Exclusive License. As with Express 2, this option grants an exclusive worldwide license for the life of the licensed patent rights. The upfront is higher – the greater of $15,000 or 15% of the total sponsored research budget. Sublicensing is allowed, and there is no initial running royalty, annual minimum or sublicensing fee. Once product sales reach $50 million in a year, a 1% royalty rate is applied.
A detailed article on the UGA Industry Express program appears in the March issue of Industry-Sponsored Research Management. To subscribe and access the full article, plus dozens more best practices and success strategies in the publication’s subscriber-only online archive, CLICK HERE.
