Academic Industry

Interactions- workshop

Motivations and ChallengesMotivations and Challenges

Many “research intensive” universities have research budgets where <10% is from industry……..

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Drivers University Industry

Financial Non-profit For-profit

Control Individual Faculty

ShareholdersManagement

Time 3 – 5 year horizons

AnnualQuarterly

Focus Explore ideasPublish results

Find solutionsKeep in-house

Failure TenuredAnother grant

Job lossOut of business

What’s important to universities?What’s important to universities?

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Nine Academic Points………University should:

Reserve rights to practice licensed inventions and to allow other non-profit and governmental organizations to do so

Exclusively license with terms to encourage technology development and use

Minimize the licensing of “future improvements”

Anticipate and help manage technology transfer related conflicts of interest

Ensure broad access to research tools

Carefully consider enforcement action

Be aware of export regulations

Be aware of patent aggregators

Consider including provisions for unmet needs (neglected patient populations, geographies), and developing world applications

Source: “In the Public Interest: Nine Points to Consider in Licensing University Technology”, March 2007

What’s important to industry?What’s important to industry?

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Ten Industry Points……..Company should:

Ensure that the license grant contains all the university rights needed to commercialize

Consider broadening the license grant to include improvements

Consider the scope of the university’s retained rights

Obtain commercially useful sublicensing rights

Seek reasonable royalty provisions for the proposed business model

Closely review payment obligations

Develop commercially reasonable performance milestones

Manage patent prosecution and deal with regulatory agencies

Ensure termination provisions work for the business

Review all sections of the agreement, even if routineSource: “Top Ten Issues in Licensing Technology from Universities”, May 2007; ipFrontline.comTM

Case Studies

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UIC: UIC:

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www.prezista.com

Research Origin NIH funded collaboration, 1997-2000 • multi-year collaborative grant• UIC chemist and NIH researchers

Intellectual Property

NIH and UIC researchers jointly disclosed discoveries, patents filed

Licensing Partner Tibotec, a small biotech in U.S. in 2001

Special Terms “Socially responsible licensing”, allowing for enhanced access in developing world

M&A of Partner Johnson & Johnson acquired licensee

FDA Approval Approved 2006 under “Fast Track” as a treatment option in HIV (human immunodeficiency virus) medicines known as protease inhibitors.

Projected Market First sales 2006, projected sales will peak in 2012 at $600m to $1.1b annually through 2019.

 

Simulation

What can go wrong?What can go wrong? – simulation – simulationSituation description:

Parties:University is a large, research and teaching

institution in engineering, medicine, and interdisciplinary technologies.

Company is a small, privately held, medical diagnostics company with one product in the pipeline. Company plans to look for a larger partner to buy technology rights and manufacturing capabilities. In the alternative, Company plans an IPO in less than 5 years.

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Dr. Founder had developed a biochemistry process while being a professor at University.

The University developed a sensor, which was made in University laboratory that is different than biochemistry lab.

The sensor together with the biochemsitry process makes a patentable and marektable platform.

Dr. Founder today is with Company.

Company is interested in commercializing the platform.

Sensor + Process = Platform

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What can go wrong?What can go wrong? – simulation – simulation

Part 1Dr. Founder excited with his findings published

his discovery in a local magazine and gained public recognition by giving talks at seminars and tech shows.

After joining Company, Dr. Founder is using HIS biochemistry process and continues his research.

Company excited by Dr. Founder’s achievements approached University with an offer to BUY the sensor necessary to build the platform the Company wants to commercialize.

What went wrong???

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What can go wrong?What can go wrong? – simulation – simulation

UniversityDr. Founder should

contact OTT before public disclosure

We will check all publications against enabling information

The process is not Dr. Founder’s – developed while employed so it’s University’s property

We prefer to license vs sell

What can go wrong?What can go wrong? – simulation – simulation

CompanyWe monitor all scientific

journals and look for technologies that can be implemented in their business

We want to develop the platform further

We will look for consulting on conflict of interest and will check when invention was conceived

Part 2(assumption: Company and University agreed to

license)University granted rights to all patents and future

developments; all fields’ worldwide, with full access to materials, know-how, and lab notes.

Company asked for only this one patent, limited to one field; doesn’t care of exclusive or non-exclusive

What went wrong?

What can go wrong?What can go wrong? – simulation – simulation

UniversityWe want to grant rights to

only one patent, specific use

Further improvements should be reserved for the University

We want limited fields and license other uses

We want to reserve a clause regarding markets in developing World

We want to reserve rights for teaching purposes

What can go wrong?What can go wrong? – simulation – simulation

CompanyWe ask for a wide

platform, with all exisiting and pending patents

Worldwide, all fields

Exclusive license

We want automatic license to all improvements

We want to control patent prosecution

Part 3University signed a license agreement with no

upfront fee and flat royalties based on sales once commercialized. No milestones set.

Company paid all patent expenses accrued so far and agreed to pay all future ones.

What went wrong?

What can go wrong?What can go wrong? – simulation – simulation

UniversityWe ask for upfront fee to

secure company’s commitment

We want milestones reached before and during commercialization

We want minimum royalties

What can go wrong?What can go wrong? – simulation – simulation

CompanyWe want lower upfront

fee to lower the risk

We want a discounted royalties to secure a smooth entry to market

We want to control patent expenses

We don’t agree with minimum royalties

Open dialogue:- Who builds a prototype?- Sponsored research agreement?- Performance diligence?- Health institutions approvals, etc.?- …

What can go wrong?What can go wrong? – simulation – simulation