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New Federal, University Agreements Established to Encourage Industry-Sponsored Research

December 14, 2011

Innovative companies involved in commercializing research with universities and federal agencies often cite complicated contracts and uncertainty surrounding the process as a barrier to bringing more technologies to the marketplace. In an effort to remove some of those hurdles, two new initiatives recently were announced from the University of Minnesota (UM) and the Department of Energy (DOE).

Hoping to provide companies with a stronger incentive to commercialize university-based technologies, UM has developed a new approach to intellectual property (IP) allowing companies to pre-pay a fee and receive an exclusive worldwide license with royalties taking effect only in case of significant commercial success. Agreements established under the new Minnesota Innovation Partnerships (MN-IP) allow a pre-paid option fee that amounts to 10 percent of a sponsored research contract or $15,000, whichever is greater. It includes an option to exclusive license with pre-set terms, no annual minimums or fees, and no time limits or milestones. In exchange, the university would collect a 1 percent royalty fee if annual sales involving licensed intellectual property exceed $20 million.

The initiative was developed by UM's Office for Technology Commercialization using feedback from business partners who were critical of the university's traditional approach. More information is available at: http://businessumn.com/2011/12/09/industry-sponsored-research/.

Meanwhile, policies under a new DOE pilot program include a more flexible framework for companies negotiating IP rights to facilitate tech transfer and using terms better aligned with industry practice. DOE will announce in January a limited number of national laboratories selected to participate in the Agreement for Commercializing Technology (ACT) program for businesses to partner with labs for R&D that commercializes technology.

Under ACT, IP is treated differently versus other agreements, such as Cooperative Research and Development Agreements (CRDAs) and Work for Others (WFO). In ACT agreements, the government will have the option to retain a narrower license to use the IP only for research purposes. ACT is available to a full range of sponsors, including start-ups and small and large businesses that provide private funding to sponsor research.

More information is available at: http://energy.gov/articles/energy-department-announces-new-initiative-re....

Minnesotahigher ed, dept of energy, commercialization, intellectual property