When inventions are created at a workplace, the employer owns the invention. Similarly, the university owns the inventions created by their faculty, although the investigator receives some of the proceeds if the invention is licensed.
Tech transfer offices license IP rights with the expectation and contractual requirement that the licensee will actively seek to develop the tech and bring it to market to benefit the public. Some companies want to license technology defensively for the sole purpose of keeping it out of the hands of competitors. But that’s the kiss of death for a publicly funded invention. To avoid that situation, tech transfer officers negotiate license agreements with milestones embedded into them.
For a company to keep a license, they must meet certain development milestones within specific time frames, especially for exclusive licenses. Timelines will be mutually agreed upon by the commercial partner and the tech transfer office. The partner is required to provide progress reports to the tech transfer office. Research and development can be tricky business because it’s not predictable. The company may get rolling on a development program and realize they were overly optimistic about when they will hit the milestones, and it becomes clear to them at some point that they will fall short. In theory, that gives the university adequate grounds to terminate the deal and license the tech to a competitor instead.
There must be an active robust transaction between the tech transfer office and the licensees to navigate these uncertain waters. Things don’t always go according to plan. If the company can’t make a milestone, they need to make it clear to the tech transfer office what the setback is and renegotiate a timeline based on what they are doing to overcome it. The relationship between a licensee and a tech transfer office is a close partnership when it works like it’s supposed to. Everything should be out in the open with no secrets between them.
- How does a company stay in compliance when it licenses a university’s technology?
- What is are the tenets of a functional, healthy relationship between a commercial enterprise and a tech transfer office?
- What are some reasons a company might have for falling behind on their milestones?