Why This Topic Is Important
The licensing contract and relationship is the most common channel through which both technologies and
the rights to develop and sell products are transferred between entities. This section provides detailed
explanations of both the strategies and the mechanics of successful licensing.
Key Implications and Best Practices: Section 11
Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.
- Besides reflecting the business deal that has been made, few components are more important in a license than clear and unambiguous definitions.
- For practical purposes, any organization engaged in high-volume licensing will find it useful to develop its own internal template agreements that are then modified and adapted to suit each special circumstance. checklists for different types of recurring licensing negotiations should be reviewed prior to and during negotiations.
- Recognize that relationships—like markets—are not static. Any provision in an agreement must, of course, be adhered to, but the practice of including sufficient flexibility in licensing agreements can be a valuable strategy in forging strong partnerships.
- The granting of options (rights of first refusal, pipeline agreements, and so forth) can be a rather controversial aspect for public sector licensing. But options can be tremendously powerful in forging strong and lasting relationships and in optimizing your institution’s economic returns and humanitarian effects.
- Field-of-use licensing should be adopted as the preferred method of licensing whenever possible. It allows you to gain greater control while maximizing the use and value of your licensed technology. But be flexible and study the licensee’s motivations and business model carefully as a way of conferring the highest possible incentives. Always strive to retain control over patent prosecution and infringement actions when adopting a field-of-use licensing strategy.
- Familiarize yourself with the various ways to deal with royalty stacking and royalty packing issues as a way of balancing risks and returns. The choice will depend on how far downstream into product development your institution stays involved.
- Negotiating about low-probability events can sidetrack progress toward agreement on core issues, so care should be taken during the negotiation to attend to issues in a manner commensurate with their strategic importance. It is often best to focus on the overall deal before entering into discussions about specifics.
- In a license agreement, the rights to sublicense and assign a license ought to be explicitly articulated.
- In research collaborations, in which employees of two or more entities share ideas and information, confidentiality provisions are important. Make sure the scientists in your institution understand these obligations and rights.
- Licensee agreements are contracts. Hence, a practical understanding of contract law will be fundamental to negotiating and drafting good license agreements. Many smaller TTOs use outside counsel to ensure that agreements are compliant with national law.
 Abstract
A Checklist for Negotiating License Agreements
by Donna Bobrowicz
Abstract:
This chapter provides a road map for licensing professionals to identify the most common terms, contractual obligations, and other provisions that are likely to be encountered in crafting a license agreement. Emphasis is placed on agricultural technology licenses. Since most people engaged in deal making are involved in multiple deals at the same time, important aspects can be forgotten or overlooked at any time and for any deal. The checklist format allows the licensing practitioner to check off each item once it has been addressed to the parties’ satisfaction. While expansive, it does not necessarily fit all contexts and is therefore intended to serve as a basis from which institutions and individuals can develop their own checklists.
Abstract
Commercialization Agreements: Practical Guidelines in Dealing with Options
by Mark Anderson, Simon Keevey-Kothari
Abstract:
An option to acquire rights in university intellectual property (IP) may be encountered in several guises: as a stand-alone agreement, as a clause within an agreement (for example, a sponsored research agreement or a material transfer agreement), or as a “pipeline,” or IP framework, agreement for a university spinout company. Although the grant of an option may often form quite a small part of a larger agreement, the grant can raise important issues in terms of an organization’s IP commercialization strategy. This is especially true of pipeline agreements that are, effectively, a specialized form of option agreement. The purpose of this chapter is threefold:
- to provide an introduction to options, and their uses, and including legal, practical, and negotiating issues
- to provide suggested templates along with guidelines concerning completion of the templates
- to consider and discuss some of issues that are problematic or of particular concern to universities.
The chapter attempts to provide information that is useful for both the beginner and the experienced research-contracts or technology transfer professional. The breadth of material covered may give the mistaken impression that university contracts are wrought with legal and commercial difficulties. Usually, this is not the case. But sometimes differences of expectation, practice, or legal culture can arise between parties negotiating an agreement, particularly in international transactions.
Abstract
Field-of-Use Licensing
by Sandra L. Shotwell
Abstract:
Field-of-use licensing provides the licensor with greater control over the use of its intellectual property, while maximizing the use and value of the technology. In order to maximize the use of a given technology, managers will have some additional work to do as they identify, negotiate with, and manage more than one licensee. Special issues related to multiple licensees in distinct or overlapping fields will have to be handled with forethought and a balancing of interests. When is field-of-use licensing worth the extra effort? When more than one company is needed to fully develop a technology’s potential, when different licensees are needed to address different markets, or when field-of-use licensing has the potential to significantly increase the financial return from a technology. In all of these situations, field-of-use licensing can produce better results for everyone involved.
Abstract
The In- and Out-Licensing of Plant Varieties
by Malin Nilsson
Abstract:
Variety licensing is a tool for plant breeding companies and institutions to commercialize their varieties and to transfer technology to farmers efficiently. As the seed industry becomes increasingly privatized, interest in in-licensing new varieties, both from national and international sources, is likely to increase. Likewise, financial pressure on public sector breeding will increase the need for the targeted commercialization of varieties through out-licensing. As the seed sector becomes more transparent, the market should see more foreign investment from companies who wish to make their varieties available through licensing. That, in turn, should promote local seed production and variety testing. The licensee and the licensor should focus primarily on the practical content of the license agreement, specifically, exclusivity to plant material and territory, plant variety protection, variety trials, national registration, royalty payment, and information transfer. The purpose of this chapter is to provide guidance for prospective licensors and licensees in the practical issues of in- and out-licensing of varieties.
Abstract
In-Licensing Strategies by Public-Sector Institutions in Developing Countries
by Kanikaram Satyanarayana
Abstract:
In the past, it was possible for some countries to ignore IP (intellectual property) management while pursuing economic development and improved public health. Globalization, however, has brought the world closer and closer together, and with the advent of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), no country can afford to be isolated from the global IP system. This chapter explains how developing countries can use this new system to their advantage through in-licensing technologies (that is, bringing technology into the public sector through patent license agreements). Offering an overview of the usual requirements of a license agreement, the chapter also considers issues that are uniquely relevant to public-sector institutions in developing countries as they negotiate such licenses.
Abstract
Licensing Agreements in Agricultural Biotechnology
by Richard S. Cahoon
Abstract:
Though similar in many ways to other kinds of license agreements, agri-biotech licenses have some unique elements that require special attention. Considering first the similarities, this chapter looks closely at the typical boilerplate language that all license agreements share and outlines the basic structures and concerns of all such agreements. The chapter then turns to the singularities of agri-biotech licenses, focusing on such issues as multiple property types that often cover a single technology and/or product, freedom to operate issues that drive anti-royalty-stacking provisions, philanthropic- and humanitarian use clauses, and stewardship obligations.
Abstract
Licensing Biotechnology Inventions
by John W. Freeman
Abstract:
After providing an overview of licensing in the field of biotechnology, the chapter carefully examines the key components of a license agreement, particularly in relation to the field’s unique concerns. The chapter raises a number of issues that licensors and licensees should consider when negotiating patent license agreements. It offers precise definitions of key terms, points out areas of the agreement that merit special attention (including the relative merits of exclusive and nonexclusive licensing), considers the difficult question of how to determine a patent’s value (especially when the patent is being used for screening purposes), and gives much-needed attention to the complexities of confidentiality agreements, especially those involving academic research institutions. To make negotiations easier and more realistic, the incentives for licensors and licensees are discussed, as are some of the finer points of development collaboration. In addition, the author offers some advice about how to define patent misuse, offering some helpful suggestions about what to do should things go bad. The goal of this chapter, however, is to ensure that agreements succeed.
Abstract
Potential Use of a Computer-Generated Contract Template System (CoGenCo) to Facilitate Licensing of Traits and Varieties
by Anatole Krattiger, John Dodds, Donna Bobrowicz
Abstract:
Licensing between companies of both traits and varieties is routine, and there is no reason that it should be anything other than routine between companies and public sector institutions, as well. Some public entities struggle to gain experience in this area. This leads companies to shun negotiations and, even, discussions. Yet opportunities for the public sector to in-license traits (in the form of well-characterized and deregulated transgenic “events”) and varieties are vast and could lead to earlier access with respect to transgenic events (through backcrossing into local varieties) and to improved varieties for subsistence farmers. In order to improve the ability of the public sector to both in-license and out-license germplasm, a test version of a software program, the “Computer Generated Contract Template System” (CoGenCo), was developed. It aims to facilitate the exchange (or licensing) of commercial varieties by “walking” potential licensors and licensees though a systematic list of questions and tested parameters. CoGenCo is a pragmatic way of increasing the licensing of both finished varieties and germplasm containing transgenes for backcrossing, and its flexibility would make it especially suited for use in developing countries. This chapter explains the concept behind the software’s test version and leads the reader through its use. The authors very much welcome comments and suggestions about the software and look forward to collaborating with interested parties to further develop CoGenCo into a comprehensive and widely available system.
Abstract
Problems with Royalty Rates, Royalty Stacking, and Royalty Packing Issues
by Keith J. Jones, Michael E. Whitham, Philana S. Handler
Abstract
Trade Secrets and Trade-Secret Licensing
by Karl F. Jorda
Abstract:
Exploiting the overlap between intellectual property (IP) categories, especially between patents and trade secrets, is an important facet of IP management. Patents (which require full disclosure) and trade secrets (which are kept confidential) are not incompatible. On the contrary, they can complement one another: patents protect inventions and trade secrets protect collateral know-how. Using patent and trade-secret protection together in a synergistic manner results in a potent exclusivity. Moreover, as licensing has become the preferred instrument for technology transfer, most technology licenses are hybrids, covering both patents and trade secrets. This situation has evolved because licenses that cover patents but do not allow access to collateral know-how usually do not permit patented technology to become commercialized. Despite the ease of obtaining trade-secret protection—immediate efficacy and low cost—this type of IP protection is too often neglected.
Abstract
Use of Trademarks in a Plant-Licensing Program
by William T. Tucker, Gavin S. Ross
Abstract:
The principal forms of IP rights protection for plant varieties are plant patents, plant variety protection patents (PVPs), and utility patents. However, trademarks can also provide long-lasting and significant protection for plant varieties. One advantage that trademarks have over the statutory forms of IP protection for plants (plant patents, PVPs, utility patents) is that trademarks can be protected indefinitely, as long as the product is marketed and the trademark enforced. The most important agreements dealing with international trademark registration are the Madrid system and the Madrid Protocol (of which the United States is a signatory). Licensing of a trademark can either stand alone or be combined with another form of IP rights protection, such as with a hybrid PVP/trademark license.
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