The content in this article builds upon a webinar delivered by Owen for Patsnap on the 27th of January 2017).There is a vast amount of ways in which you can structure intellectual property collaboration between a university and business. This article looks to provide guidance and points for consideration by both sides.

University patents

There are well over 10,000 universities around the world, with hundreds of thousands of academics working within them. They spend hundreds of billions of dollars each year on research, which in turn generates a plethora of ideas, insights and innovations.Over the last decade, universities have increased their efforts to generate revenue from their research. In order to do this effectively, robust protection is put in place. The number of university-held patents has been steadily increasing over the last few decades.

There are hundreds of thousands of active patents held by universities, many of which are available for licensing. Companies are increasingly looking for access to these patents through licensing agreements and this article looks to provide guidance to both sides when negotiating access to a specific piece of IP.

 Reserved rights for teaching and research purposes

In the UK and US, universities are classed as Registered Charities. To maintain this status, they must not do anything which restricts their ability to deliver their primary purpose. This is to educate and perform research to further scientific understanding. As a result, many university IP deals will have a non-negotiable clause which states that even if exclusively licensed, the contents of the IP must still be available for research and teaching purposes.

Restriction of IP for certain applications

Many universities will have policies in place that will not allow their research outputs to be used for purposes that they or their student population do not agree with. It is quite common to see restriction on the use of university IP in fields such as Arms or Tobacco products.

Conditions on the money that funded the research

The majority of university IP is generated through research funded by third parties i.e. by government or industry. It is also very common for this IP to have been generated through collaboration with academics from multiple institutions. Much of this third-party funding comes with conditions which must be applied to the resulting IP. This may mean that multiple universities hold the rights or certain rights to commercially exploit the IP could already be assigned.

 Which part of the patent is to be accessed?

It is in neither party’s interest for a patent to not be fully exploited. A license can be given for all rights to a patent but it is also possible to exclude certain areas. This would normally reduce the cost of access as the university would be free to license the bits remaining to other companies. There are three main ways in which rights to access can be carved out:

  1. Territory — a company may have a business strategy where they know they will only operate within the certain geographical area. They could agree a license that only gives them the rights in the territories they wish.
  2. Sector/Field — another company may only wish to use the IP within a well-defined sector e.g. oil and gas or automotive. A license can be agreed for rights to use the IP in these fields.
  3. Product Type — another way of limiting access could be to restrict the rights to certain types of product e.g. drones, domestic heaters, trucks over 1 tones.

What type of access do you require?

There are three types of access to consider:

  1. Full ownership(where patent is transferred entirely to company)
  2. Exclusive access
  3. Non-Exclusive access

Most of the time, a company will want to have exclusive rights to use the IP; otherwise their competitors could come along and create a rival product. Non-Exclusive rights may be appropriate if the company just wants to make sure that they have freedom to operate. The cost of access will normally be lower for non-exclusive access although not always by much. The granting of a non-exclusive license will stop a university’s ability to offer an exclusive license to other companies in the future, and therefore stop them realizing its true value.

What is the status of the background and foreground IP?

All research builds on ideas and insights that have come before. This means that the IP in question may require access to additional IP — i.e. Background IP. This access should be negotiated alongside access to the IP in question; otherwise the company may not be allowed to create a commercial product without the need to return to the table for further negotiation.

It is also worth checking to see if the research that led to the IP in question continued and if so, did it lead to additional patents or are there any planned patents in the pipeline.