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Master Reagent Agreement boosts efficiency for both TTO and licensees

This article appeared in the February 2014 issue of Technology Transfer Tactics. Click here for a free sample issue or click here to subscribe.

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With the typical TTO holding more invention files than they can handle with current staff, boosting efficiency and speeding throughput are critical goals for many. Emory University in Atlanta has made a big stride in that direction with a 23-page “Master Reagent Agreement” for routine reagent licenses. The master agreement saves TTO staff precious time that can then be deployed elsewhere in the operation.

“Using the Master Agreement approach has been a win-win proposition for the office and our research tool business partners,” comments J. Cale Lennon III, PhD, MBA, CLP, licensing director in the Office of Technology Transfer, “as it provides a way to very efficiently execute multiple licenses with the same company.”

The master agreement program applies to licenses for reagents only, he says. “Unlike agreements for the software, medical devices and therapeutics that make up much of our technology portfolio,” notes the Emory OTT blog, “research tools require little additional development, can be quickly commercialized and generate revenue, albeit small when taken individually, in a short amount of time.”

The master agreement “covers all the general provisions that would be included in any license,” the blog explains, “such as liability, reporting, diligence and confidentiality.” Those terms then apply to any subsequent reagents or tools transferred to the company, allowing Emory and participating companies to negotiate “upfront and only once, thus removing the time and burden of revisiting these terms [when] each individual tool is licensed to the company.”

Any specifics agreed upon by the two parties outside the master agreement framework are handled by a simple two-page amendment that covers the financial components — upfronts and royalties, in particular, as well as shipping, terms and quantities.

Master agreement details

Here’s how the document handles the templatable aspects of a license:

“From time to time, Emory may determine, at its sole discretion, to offer to Company licenses to certain materials. In order to benefit both parties by reducing the transaction costs of negotiating such licenses, Emory and Company hereby agree that certain licensing offers for materials made to Company by Emory during the term of this Master Agreement shall be subject to the terms and conditions of an individual license, as defined herein, which will make specific reference to the existence of this Master Agreement, and which will be negotiated between the parties in each instance; and Emory and Company further agree that each and every term and condition set forth in Articles 2 through 15 of this Master Agreement will be deemed incorporated into each individual license by reference. Emory and Company hereby agree that the terms and conditions attached to each and every individual license and those of this Master Agreement, whenever possible, will be construed not to be in conflict; and if such construction is not possible, the terms and conditions set forth in this Master Agreement shall control unless the individual license expressly states that overriding a particular conflicting term of the Master Agreement is the mutual intention of the parties.”

Where necessary, the master agreement defers specificity to the associated individual license. Under the Grant of License section of the master agreement, particulars are handled like this:

“Emory hereby grants Company and its affiliates a license, the level of exclusivity of which is stated with particularity in the individual license, under its rights in and to the materials and licensed technology to make, sell, offer to sell and import the licensed products, but only in the field of use and without the right to sublicense, for the term of this Master Agreement, unless sooner terminated according to the conditions and terms hereof.”

References to the numbers involved are also bounced to the two-page amendment, as follows:

“In consideration for the license granted hereunder, during the term of this Master Agreement Company shall pay to Emory the running royalties on sales of each licensed product and other consideration as set forth in the individual license.”

The terms of royalty reports, however, remain constant license to license, and so are detailed in the master agreement:

“During the term of this Agreement, Company shall furnish, or cause to be furnished, to Emory written reports governing each of Company and Company’s affiliates fiscal quarters showing:

  • the gross selling price and the number of units of all licensed products (identified by product number/name) sold by Company and its affiliates, in each country of the licensed territory during the reporting period, together with the calculations of net selling price in accordance with Section 2.13; and
  • the royalties payable in dollars, which shall have accrued hereunder in respect to such sales; and
  • the exchange rates, if any, in determining the amount of dollars; and
  • the occurrence of any event triggering any other payment in accordance with the provisions of the individual license.

Impact unclear but efficiency is obvious

Antibodies are the category of research reagents that dominate in the master agreement program, Lennon reports. “Since the initial Master Reagent License was put in place in 2010, all of the licenses executed for research antibodies have utilized [that] format, so it appears that companies like it,” he comments. “It would be difficult to make any direct correlation between licensing activity data and the implementation of the Master Reagent Agreement, though, as other factors such as marketing efforts would also have impacted the number of licenses that have been executed.”

It’s hard to pinpoint the agreement’s impact on human resources use, too, he adds, though the speed and convenience are readily apparent. “We don’t have any specific data on how much of a time savings results from using the master agreement approach,” he says. “Completing the follow-on licenses is very quick and it’s usually feasible to have them finalized within a week of receiving the initial request from the licensee. Using this approach also provides greater flexibility with respect to which members of the licensing team can most efficiently manage a follow-on reagent license, as it enables any licensing professional within the office to more quickly and easily put in place a follow-on agreement with a company, even if that individual didn’t negotiate the initial Master Agreement.” All that needs to be negotiated are the financial terms for the specific reagent.

The bottom line? That’s hard to calculate precisely, too. “We haven’t collected data on the specific impact on licensing revenue,” Lennon tells TTT. “However, it seems conceivable that the efficiency and ease associated with executing these licenses would give companies the perception that the office is a desirable business partner to work with, and they would be motivated to continue to execute licenses for additional research tools.”

The positive effect on deal flow is probably the more important outcome, he adds, “as it provides an effective mechanism for these tools to be made widely available to the research community.”

Indeed, the motivation behind the Master Reagent Agreement was simple: to streamline the process for the repeated execution of research tool licenses with commercial reagent suppliers. “In response to the office’s ongoing marketing efforts focused on new research tools,” Lennon notes, “previous research tool licensees often would like to obtain rights to those new materials. By entering into a Master Agreement, it saves time and effort by avoiding the drafting, review and negotiation of a new full-length license with the same licensee.”

So far, the master agreement hasn’t needed updating. “It’s been our experience so far that the components listed on the short, two-page ‘variable’ part of the license work well,” Lennon reports. “It actually provides investigators with a very succinct summary of the terms of the license that are probably of most interest to them, which is helpful for their personal record keeping purposes and for facilitating their shipment of the reagent to the company.”

And, he adds, while “there have been modifications to some of the language during the initial negotiation of the master agreement portion of the license, once that part of the license is finalized, it is carried through for all additional follow-on licenses, which is the key advantage of using a master agreement.” Contact Lennon at 404-712-4758 or at 

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