Industry-Sponsored Research Week
University-Industry Engagement Advisor

Automatic licensing in industry-sponsored research: Does it pay off?


By David Schwartz
Published: April 16th, 2019

“The jury is still out” on automatic (pre-negotiated) licensing in industry-sponsored research, said a trio of attorneys who comprised the panel for a session entitled “Automatic Licensing Initiatives: How they work and how they are working,” at the recent AUTM 2019 conference in Austin, TX.

Universities that have used such models either in a programmatic or an ad hoc approach, they noted, have generally not been able to demonstrate significant increases in revenue through the generation of new sponsored research, which would theoretically offset lost revenues from future royalties that are typically foregone in such deals. However, they added, both faculty and sponsors involved in pre-negotiated licenses “love it.”

Even so, at the universities which employ automatic licensing, the pre-negotiated agreements represent a relatively small percentage of their total agreements.

The automatic licensing deals in most cases are seen as a way to attract more industry sponsors, who increasingly want to limit lengthy negotiations around IP terms. The deals offer potential corporate sponsors a research agreement with a pre-defined, upfront license fee that is often a percentage of the total research expenditure or a flat fee, sometimes with a “bonanza” clause that kicks in if licensed products reach a threshold of sales, at which point royalties would accrue to the university. In general, sponsors like the approach not only because of reduced negotiating time, but because they can predict their costs and not get hammered later by what they might perceive as an overly burdensome royalty rate.

“There have been pressures for a ‘friendlier’ approach [to agreements in industry-sponsored research], noted Kate Donohue, associate general counsel at the University of Pennsylvania. “When I started representing institutions for sponsored research (about 20 years ago), they never granted a company more than an option to license,” she said. “You might have gotten non-exclusive royalty free research that only a license might have, or sometimes commercially non-exclusive royalty free. But even that I consider an erosion of the traditional approach — and they definitely did not get a commercially exclusive royalty free license in the sponsored research agreement.”

Also, she noted, in a traditional license agreement you would only license technology that existed; improvements were not automatically rolled into the agreement. “If we gave an option at all it would have been on commercially reasonable terms to be determined later,” said Donohue. “Sponsors did not like this; they like to know what they’re getting into when they fund research. They asked either for the license to be built into the research agreement or attached to it. This is difficult from a tech transfer perspective because you do not get royalties from it, and it is usually granted without strings.”

A growing number of universities are offering programmed automatic licensing, she continued, in which the institution has formally adopted a licensing program, gone through all of the approvals, it’s been marketed, and it has a name — for example, the University of Minnesota’s MN-IP program. “Ad hoc is when it happens on a one-off basis; you may not even be aware that it’s going on at your institution,” she said.

An ad hoc deal involving pre-negotiated IP terms might occur when there’s enough money on the table, Donohue noted. “For example, if the sponsor will give you $50 million to fund a gene therapy program but wants [specific] terms for any IP that comes out of it, you’ll listen to them and [probably] meet the requirements.” When there’s a really big deal you might have gotten the tax office involved, she added, since pre-negotiation can call your non-profit status into question — and it’s important to make sure the tax implications are well understood and dealt with.

But you might not have thought of the tax impact when it comes up under a routine MTA if you grant rights to the material provider to IP that does not exist yet. “There can also be license agreement improvements language we’ve seen where sponsors constantly try to change the patent rights definition to include existing rights as well,” she noted.

This can even happen where federally funded research is involved, she continued. “[Sponsors] will tell you lots of universities have told them you can’t do this with federally funded research, but that they’ve used it at other institutions [with federally-funded research],” Donohue shared. “They can slide in this language where you least expect it, so be aware.”

An in-depth article on automatic licensing in industry-sponsored research appears in the April issue of University-Industry Engagement Advisor. For subscription information, CLICK HERE.

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WUSTL School of Medicine and Centene to collaborate on personalized medicine research


By David Schwartz
Published: April 16th, 2019

Washington University School of Medicine in St. Louis and healthcare company Centene have formed a personalized medicine collaboration to accelerate research into treatments for Alzheimer’s disease, breast cancer, diabetes, and obesity. continue reading »

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Overcoming Joint IP Ownership Challenges in University Research Partnerships


By David Schwartz
Published: April 16th, 2019

In a perfect world, universities would enjoy collaborating on research projects with a myriad of partners, costs would be shared fairly among partners, everyone would agree on IP ownership, and they would live happily ever after. But the real world is far from perfect, and it’s critical that your university’s IP rights are carefully defined and protected when working with other schools, corporations, and other partners. The cost of inadequate preparation and contractual protection can be huge, from hefty litigation costs to invalid patents or loss of IP, not to mention damage to important relationships.

That’s why Technology Transfer Tactics’ Distance Learning Division is teaming up with Rodney Sparks, JD, PhD, from the University of Virginia Licensing & Ventures Group, to discuss how to protect your ownership stake, remain a good research partner, and deal with conflicts when they arise. Please join us next Thursday, April 25th, for this practical and timely webinar: Overcoming Joint IP Ownership Challenges in University Research Partnerships. For complete program details and to register, CLICK HERE.

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Mississippi State opens Boeing-funded stitched composites development center


By David Schwartz
Published: April 16th, 2019

Mississippi State University hopes to advance research and economic development in the state with its just-opened Marvin B. Dow Stitched Composites Development Center, located at the MSU Advanced Composites Institute. continue reading »

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J&J Innovation and Children’s National Health System Launch JLABS @ Washington, DC


By David Schwartz
Published: April 16th, 2019

Johnson & Johnson Innovation LLC and Children’s National Health System are partnering to launch JLABS @ Washington, DC, a 32,000-square foot facility to be located at the new Children’s National Research and Innovation Campus. The co-location of the Research and Innovation Campus with key partners in the areas of public health research, innovation and incubator space is designed to accelerate the translation of discoveries into new treatments and technologies. The new JLABS site will be open to pharmaceutical, medical device, consumer and health technology companies. continue reading »

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Effective Models of University-Industry Engagement: Case Studies in Success


By David Schwartz
Published: April 16th, 2019

Industry’s reliance on university collaborations for R&D is no longer just a trend – it has become more like a seismic shift. Innovation-starved corporations are eagerly seeking out university partners, but only those universities that have embraced this shift and prepared their campuses for a new level of integrated industry engagement will reap the benefits.

As part of its mission to support holistic industry engagement and assist universities in attracting more corporate partners, University-Industry Engagement Advisor has produced a distance learning collection featuring four leading universities that have used innovative strategies and proven programs to achieve robust relationships with corporate partners. Kansas State University, Brown University, the University of Georgia, and the University at Buffalo are prime examples of how to foster welcoming and comprehensive industry engagement initiatives that result in research funding, job creation, philanthropic funding, talent pipeline development, and economic development.

Effective Models of University-Industry Engagement: Case Studies in Success features the details behind each of these program in four in-depth presentations. The collection comes complete with the original program materials and in three formats — DVD, on-demand video, and PDF transcript — so you can listen and share them with your entire staff at your convenience in any format. For complete details on this valuable collection, CLICK HERE.

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U of Louisville inks research deal with Qualigen for RAS inhibitor cancer drug


By David Schwartz
Published: April 16th, 2019

The University of Louisville and Qualigen, Inc. have entered into a sponsored research agreement to develop several small-molecule RAS inhibitor drug candidates. Under the terms of the deal, Qualigen is assuming funding responsibility for the research program from April 1, 2019 through September 30, 2020. continue reading »

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MIT launches Lockheed-backed seed fund to foster Israeli research partnerships


By David Schwartz
Published: April 16th, 2019

Aerospace giant Lockheed Martin and MIT International Science and Technology Initiatives (MISTI) have created the MIT-Lockheed Martin Seed Fund, promoting collaborations between MIT and research institutions in Israel. continue reading »

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Universities creating large scale ‘research Meccas’ to attract more industry


By David Schwartz
Published: April 9th, 2019

Impressive development projects and equally lofty goals are typical of the innovation centers and districts a number of universities are pouring money into as a way to create magnets — they hope — for a greater influx of industry partners to their campuses. These projects typically involve large buildings and tens of millions of dollars in cost. Is it worth it, and is that what it takes to attract industry in this era of university-industry collaboration?

Major innovation developments being planned at Michigan State University and the University of Georgia are two examples of these investments, and those involved see them as imperatives, at least in their markets and in their circumstances.

Michigan State, which opened the Grand Rapids Research Center in 2017 with the goal of pursuing new treatments for cancer, Alzheimer’s and Parkinson’s, now plans a second building to help realize the vision of Norman J. Beauchamp Jr., MD, MHS, dean of the MSU College of Human Medicine. Health Innovation Partners, a joint venture between Rockford Construction, a local firm, and two Chicago companies, will be breaking ground on a building that could be between seven and nine stories high with as much as 250,000 square feet, significantly larger than the original research building. There are also tentative plans for a third building.

Beauchamp says there is a direct connection between attracting industry partners and improved health for patients, and he also maintains that scale is a major factor in encouraging the kind of ecosystem development needed to pique those partners’ interest.

The bottom line, Beauchamp maintains, is that bringing partners to the table ultimately brings better health to patents. “At its core, it’s how do you bring health and healing to people faster?” Beauchamp challenges. “If you want to get that care to patients you have to have partners who understand how to go from discovery to product, and that is one of the bigger reasons we pursued this.” The pieces just below the surface mission, he adds, include licensing, patenting, commercialization, manufacturing and distribution.

While the building begins in Michigan, meanwhile in Athens, GA, an entire ecosystem is taking shape. A task force assembled by University of Georgia President Jere Morehead to do a feasibility study has identified eight parcels of land totaling about 12 acres in the downtown area as the heart of the school’s Innovation District Initiative. A master plan is currently being developed, with a major focus on attracting industry players for long-term partnerships.

The district is part of Morehead’s vision for a “campus of the future” that’s a hub for start-ups and research commercialization. “At the broadest level, UGA wants the Innovation District Initiative to become a more powerful driver of innovation and the ecosystem,” says W. Kyle Tschepikow, PhD, special assistant to the president and director for strategy and innovation at the University of Georgia.

In addition to attracting industry research partners, “we’re also interested in providing industrial experiential learning opportunities to make our bright students more successful after they graduate,” says Tschepikow. “As a land grant R1 type of university, isn’t this what we should expect? Our mission is all about leveraging the university to benefit communities.”

An in-depth article on the large-scale projects under way at UGA and MSU appears in the March issue of University-Industry Engagement Advisor. For details on subscribing, CLICK HERE.

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MIT terminates funding and research links with China’s Huawei and ZTE


By David Schwartz
Published: April 9th, 2019

The Massachusetts Institute of Technology is terminating all research and funding ties with Chinese tech firms Huawei and ZTE in response to U.S. federal probes into sanction violations and espionage, according to a letter from university officials. continue reading »

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Cultivate Winning University-Industry Relationships Through Corporate Affiliate Programs


By David Schwartz
Published: April 9th, 2019

Corporate affiliate programs are designed to provide members an exclusive view into the research and activities of specific departments or programs within a university and foster dynamic collaborations between the university and the affiliate program members. They also allow university researchers to better understand, appreciate and meet the needs of industry. The benefits to each party can be profound, from new revenue, new partnerships, and licensing opportunities for the university to talent acquisition, a ready source of valuable innovations, and a competitive advantage for corporate affiliates. In short, these programs have proven to be an outstanding funnel for long-term value and growth in industry engagement.

That’s why Technology Transfer Tactics’ Distance Learning Division is teaming up with Todd Cleland, PhD, Senior Director of Corporate Relations for the University of Washington, to discuss how to structure, manage and grow various types of corporate affiliate programs. Please join us on May 16, 2019 for this business-building webinar: Cultivate Winning University-Industry Relationships Through Corporate Affiliate Programs. For complete details and to register, CLICK HERE.

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Clemson and Arthrex Inc. launch pilot to prepare students for growing surgical device industry


By David Schwartz
Published: April 9th, 2019

The rapidly growing and evolving surgical device industry is increasingly seeking to hire employees with a specialized skillset, and a new partnership between Arthrex Inc. and Clemson University is targeting that talent gap. continue reading »

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