When licensing technology from a university or partner company, several key terms (jargon))are crucial to understand. As a scientists or engineers you should familiarize yourself with these terms which typically appear in a technology transfer agreement (TTA). Below are the core Terms and essential elements in a TTA.
- Grant of Rights:
- Exclusive License: The licensee has the exclusive right to use the technology within a defined scope.
- Non-Exclusive License: Multiple parties can be licensed to use the technology.
- Field of Use: Limits the scope of the license to specific applications or markets.
- Territory: Defines the geographic area where the license is valid.
- Royalty Payments:
- Royalty Rate: The percentage of revenue or sales that the licensee pays to the university.
- Minimum Royalty Payments: A minimum amount the licensee must pay, regardless of sales.
- Milestone Payments: Payments made upon achieving specific milestones, such as clinical trial milestones or regulatory approvals.
- Term of the License:
- Initial Term: The initial duration of the license.
- Renewal Terms: Provisions for renewing the license.
- Sub-Licensing:
- Whether the licensee can grant sublicenses to third parties.
- Reporting Requirements:
- The licensee’s obligation to provide regular reports on the development and commercialization of the technology.
- Patent Rights:
- Ownership of patents and patent applications.
- Obligations to maintain patent rights and file continuation applications.
- Confidentiality:
- Obligations to keep confidential information related to the technology.
- Indemnification:
- Provisions for indemnifying the university against claims or liabilities arising from the use of the technology.
- Termination:
- Conditions under which the license can be terminated, such as breach of contract or failure to meet milestones.
Below are the comprehensive lists of jargons for further understanding.
Intellectual Property (IP): This encompasses patents, trademarks, copyrights, and trade secrets that protect the technology.
Technology Transfer Office (TTO): A university office responsible for identifying, protecting, and commercializing intellectual property.
Licensing Agreement: A legal contract between the technology owner (usually a university) and a licensee, granting the licensee the right to use the technology under specific terms and conditions.
Licensing Terms and Conditions
Royalty Fees: Payments made by the licensee to the licensor based on the commercial success of the technology.
Milestone Payments: Payments made at specific stages of the technology’s development, such as clinical trial milestones or regulatory approvals.
Exclusive License: Grants the licensee exclusive rights to use the technology within a defined territory or field of use.
Non-Exclusive License: Multiple licensees can be granted rights to use the technology.
Field of Use: Limits the scope of the license to specific applications or markets.
Term of the License: The duration of the license agreement.
Sub-Licensing Rights: Whether the licensee can grant sublicenses to third parties.
Confidentiality: Obligations to keep confidential information related to the technology.
Indemnification: Provisions for indemnifying the licensor against claims or liabilities arising from the use of the technology.
Additional Terms and Concepts
Patent: A legal document granting the inventor exclusive rights to their invention.
Trademark: A symbol, word, or phrase that identifies and distinguishes a product or service.
Copyright: A legal right granted to the author or creator of an original work.
Trade Secret: Confidential business information that provides a competitive advantage.
Due Diligence: A thorough investigation of a technology or a potential partner to assess risks and opportunities.
Commercialization: The process of bringing a technology to market, including product development, manufacturing, and marketing.
Spin-off Company: A new company created to commercialize a specific technology.
Understanding these terms is crucial for navigating the complex landscape of technology transfer. By working closely with technology transfer offices and legal counsel, you can effectively license technology and maximize its commercial potential.