When your company is licensing technology from a university, securing fair and manageable terms is crucial for your future success. But how do you determine what’s “fair” and structure a deal that your startup can afford?
In this insightful video, Phil Crowley, founder of Crowley Law LLC and an experienced business and technology lawyer, shares practical strategies for approaching university technology license negotiations.
Key takeaways to help you get a better deal:
Conduct Thorough Due Diligence: Before entering serious negotiations, do your homework. Go out on the internet and research what other companies have paid for similar technologies. Look for information on typical royalty rates, upfront payments, and other financial terms in your industry.
Understand Common University License Costs: Be prepared for standard components of university licenses, which often include not only royalties and upfront fees but also the requirement for your company to reimburse the university’s patent costs.
Think Creatively About Deferring Costs: Don’t assume all costs are fixed and due immediately. Explore options to creatively defer certain payments, like patent cost reimbursement, until your company has achieved specific milestones, secured further investment, or is generating revenue. This can significantly ease the early financial burden.
Seek Experienced Legal Counsel: Navigating these agreements and identifying opportunities for favorable terms requires expertise. Phil strongly advises speaking with an experienced business and technology lawyer who can help you understand your options, negotiate effectively, and structure an agreement that makes it more affordable to acquire the legal rights to develop promising university technology.
Getting the right terms in your university license agreement can make all the difference in your ability to successfully commercialize an innovation.
If your startup is looking to license technology from a university, these practical tips are for you.
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