Why does the University patent, market and license
The primary objective in developing a patenting and licensing
strategy for an invention is to support the research, education and
public benefit mission of the University.
How do inventors share in the benefits of licensing
UCR inventors receive a share of the net royalties and fees from
licensing (including equity), in accordance with the UC Patent
Policy. Royalty payments to inventors are made each year in
November based on the preceding fiscal year income, expense, and
reimbursement. If you have a question about income associated with
the commercialization of your invention, please contact the OTC and
we will be happy to discuss it with you.
How does OTC market disclosed UC inventions?
Once your invention has been disclosed to the OTC via an
invention disclosure form, and some form of patent protection has
been initiated, the OTC pursues:
Direct Personal Contacts
Before a technology is licensed, your licensing officer will
discuss the technology personally with the potential
licensee. Frequently, the first meeting will be the result of
a telephone contact and visit to the licensee. This helps to
clarify interest early in the process and enables the licensing
officer to meet many of the individuals who are interested in the
technology from various perspectives.
UCR's active technologies are listed on our website and can be
easily searched by technology field, and key word. Our
technology listings are also referenced on other sites, including
the sites of the Association of University Technology Managers
(AUTM) and iBridge among others. A growing number of
qualified potential licensees are contacting OTC based on
information they first obtained from these websites. The OTC
also has an always growing list of companies and their interests in
technology fields of research as potential licensees.
Your own presentations and papers at scientific meetings can be
important in licensing. Contacts made in connection with such
presentations can be a good source of potential licensees. Please
consider sending copies of these presentations along with any
commercial contacts made to the Licensing Officer supporting your
Conferences and Trade Shows
UCR participates in a number of technology transfer conferences
each year such as BIO and the Association of University Technology
Managers (AUTM) among others. Attendees at these shows
include industry managers and directors of business development as
well as representatives from other technology transfer offices
across the country.
What Is In UCR License Agreements?
A license agreement gives rights to use a technology for further
development towards commercialization. License agreements typically
include the following elements:
License fees are paid once the license agreement is signed. The
amount depends on the value of the technology.
Patent reimbursement fees are paid to the University by a
licensee in order to defray patent processing costs. Domestic
and foreign patent filing fees, intellectual property attorney's
fees, and any late fees are all captured by the patent
Development Period with Milestone Payments toward
When a technology requires extensive development, our license
agreements will provide for a development period. This means the
licensee will be asked to submit a development plan that outlines
the work planning to be done during the development period.
Thereafter, the OTC verifies to confirm progress towards the
developments and milestones in the licensee's commercialization
plan. Frequently, those milestones will specify milestone
payments. Milestone payments help reduce initial license fees on
high-risk projects since these milestone payments are made only
when the milestones are achieved.
Royalties are paid when products that use the technology are
sold. Royalties may be calculated on a percentage-of-sales,
gross or net sales of product, or fee-per-unit basis, depending on
the standard in that market.
At the end of any internal or external development periods, we
will expect an annual minimum royalty. Any royalties actually
earned will be credit toward the minimum royalty, so the minimum
royalty is normally not an additional fee. Minimums encourage
active marketing of each technology.
Can UCR accept equity in a License Agreement?
The university equity policies apply if the university receives
equity in consideration of licensing the invention to the start-up
company. University equity policies and guidelines generally
state that in appropriate circumstances, the university may accept
equity as partial consideration for technology licensing. These
policies are in place in recognition that small or start-up
companies may find it particularly difficult to commit significant
cash outlays for both developmental and licensing costs. In such
cases the university may accept equity, in lieu of cash, for
license fees. When accepting equity, the university seeks to hold a
position of 10% ownership or less in a licensee at the time that
the licensee becomes a publicly traded company. The university will
not hold a position on the board of directors, and will not
exercise voting rights, but may exercise observer rights on the
board of directors.
In the end, many technologies patented by the OTC are never
licensed and many of those that are licensed never pay royalties
exceeding their patent costs. Part of this is because the OTC
accepts a large percentage of the disclosures it receives for
patenting provisionally. Many universities can risk patenting
only the top 10 percent of the technologies they receive as
disclosures...or not patent any of them unless a licensee can be
found to pay the patent costs. Moreover, while some
technologies are licensed within a relatively short time, others
need more time to let the market catch up with the
technology. Sometimes it is the second license negotiation
that works for everyone.
This has been a brief overview of the way the OTC team works to
license and administer UC technology. Please remember that you are
also an important member of the team. If you have any
questions on licensing, give your licensing officer a call.