Licensing 101 for Inventors & Startups
INVO HELPS INVENTORS AND STARTUPS UNDERSTAND
THE UNIVERSITY TECHNOLOGY LICENSING PROCESS
The second seminar in the 2013-14 INVO Commercialization series, “Licensing Technology from an Academic Institution: A How-To Primer,” provided inventors and startups in all fields with insight into the licensing process.
Presenter Ed Pease, JD, a Partner at WilmerHale LLP who specializes in legal issues faced by early-stage technology companies, provided a comprehensive overview of this process. More than 30 people attended the seminar, which covered topics ranging from understanding university technology transfer to licensing terminology to expenses associated with licensing.
“Anyone considering licensing a technology from a university should do their homework on the licensing process,” said Mr. Pease. “Knowing some of the nuances and intricacies, as well as understanding what the university will license to you on what terms, can prepare you for the negotiation process. Also, people tend to underestimate how long it takes to obtain a license. Be aware that it could take approximately 22 months.”
Startups should consider their business objectives before licensing a technology. What is the role of the technology in the business? Do you need to license multiple technologies from the university? Will you need investors? How do you negotiate to get to “yes?”
“In addition to considering what your business needs, it will benefit you to know in advance what type of license the university will grant. If you’re going to be looking for investors to provide capital, you will want to make sure that the university is willing to grant you an exclusive license for that technology.”
Exclusive licenses prohibit others from using the technology for the duration of the license, whereas non-exclusive licenses allow the technology to be licensed to multiple users at once. Costs may also be a factor for some startups, as there are often fees, expenses, obligations or royalties associated with licensing a technology.
Jason Sandler, a JD-MBA candidate at Northwestern University School of Law and Kellogg School of Management and a co-founder of the startup Innoblative Designs attended both this seminar and the previous seminar in the series; “Legal Aspects of Commercialization.” He noted that he knew little about licensing university technology prior to attending the seminar.
“My biggest takeaway was that license negotiations are tremendously context-dependent,” said Mr. Sandler. “We have to think about whether our commercialization activities will require additional licenses—potentially from external entities—as well as the costs of the development that went into the patent that we wish to license and even the expected margins from our product.”
“The goal of this seminar series is to provide practical information to those interested in commercializing an invention. This particular seminar was designed to educate potential licensees on the process to help them plot the most direct course to successfully negotiate with the university,” said Sonia Kim, PhD, Manager for Marketing and Industry Partnerships at INVO. “INVO invention managers may provide some guidance to the licensees, but since INVO is sitting at the other end of the negotiating table, it’s in everyone’s best interest for the licensee to know what they want to achieve with their startup before initiating a licensing agreement.”
Mr. Pease offered these last words of advice to attendees: “In my experience, Northwestern University is very startup-friendly. INVO is supportive of licensee startups and fosters company growth. That said, seek out guidance on your specific licensing needs, which may mean engaging outside counsel to make sure your interests are protected during the license negotiation.”
Disclosure: Mr. Pease negotiated a license with Northwestern University on behalf of SiNode Systems, a Northwestern University startup.
If you have specific questions or an idea you’d like to discuss, please contact us at firstname.lastname@example.org or (847) 467-2097.
To see technologies available to license, please visit northwestern.flintbox.com