Office of Research, UC Riverside
Office of Technology Commercialization

Licensing Process

Why does the University patent, market and license inventions?

The primary objective in developing a patenting and licensing strategy for an invention is to support the research, education and public benefit mission of the University.

How do inventors share in the benefits of licensing agreements?

UCR inventors receive a share of the net royalties and fees from licensing (including equity), in accordance with the UC Patent Policy.  Royalty payments to inventors are made each year in November based on the preceding fiscal year income, expense, and reimbursement. If you have a question about income associated with the commercialization of your invention, please contact the OTC and we will be happy to discuss it with you.

How does OTC market disclosed UC inventions?

Once your invention has been disclosed to the OTC via an invention disclosure form, and some form of patent protection has been initiated, the OTC pursues:

Direct Personal Contacts
Before a technology is licensed, your licensing officer will discuss the technology personally with the potential licensee.  Frequently, the first meeting will be the result of a telephone contact and visit to the licensee.  This helps to clarify interest early in the process and enables the licensing officer to meet many of the individuals who are interested in the technology from various perspectives.

OTC Website
UCR's active technologies are listed on our website and can be easily searched by technology field, and key word.  Our technology listings are also referenced on other sites, including the sites of the Association of University Technology Managers (AUTM) and iBridge among others.  A growing number of qualified potential licensees are contacting OTC based on information they first obtained from these websites.  The OTC also has an always growing list of companies and their interests in technology fields of research as potential licensees.  

Technical Presentations
Your own presentations and papers at scientific meetings can be important in licensing. Contacts made in connection with such presentations can be a good source of potential licensees. Please consider sending copies of these presentations along with any commercial contacts made to the Licensing Officer supporting your disclosure.

Conferences and Trade Shows
UCR participates in a number of technology transfer conferences each year such as BIO and the Association of University Technology Managers (AUTM) among others.  Attendees at these shows include industry managers and directors of business development as well as representatives from other technology transfer offices across the country.

What Is In UCR License Agreements?

A license agreement gives rights to use a technology for further development towards commercialization. License agreements typically include the following elements:

License Fee
License fees are paid once the license agreement is signed. The amount depends on the value of the technology.

Patent Reimbursement

Patent reimbursement fees are paid to the University by a licensee in order to defray patent processing costs.  Domestic and foreign patent filing fees, intellectual property attorney's fees, and any late fees are all captured by the patent reimbursement fee.

Development Period with Milestone Payments toward Commercialization

When a technology requires extensive development, our license agreements will provide for a development period. This means the licensee will be asked to submit a development plan that outlines the work planning to be done during the development period. Thereafter, the OTC verifies to confirm progress towards the developments and milestones in the licensee's commercialization plan.  Frequently, those milestones will specify milestone payments. Milestone payments help reduce initial license fees on high-risk projects since these milestone payments are made only when the milestones are achieved.

Royalties

Royalties are paid when products that use the technology are sold.  Royalties may be calculated on a percentage-of-sales, gross or net sales of product, or fee-per-unit basis, depending on the standard in that market.

Minimum Royalty

At the end of any internal or external development periods, we will expect an annual minimum royalty. Any royalties actually earned will be credit toward the minimum royalty, so the minimum royalty is normally not an additional fee.  Minimums encourage active marketing of each technology.

Can UCR accept equity in a License Agreement?

The university equity policies apply if the university receives equity in consideration of licensing the invention to the start-up company.  University equity policies and guidelines generally state that in appropriate circumstances, the university may accept equity as partial consideration for technology licensing. These policies are in place in recognition that small or start-up companies may find it particularly difficult to commit significant cash outlays for both developmental and licensing costs. In such cases the university may accept equity, in lieu of cash, for license fees. When accepting equity, the university seeks to hold a position of 10% ownership or less in a licensee at the time that the licensee becomes a publicly traded company. The university will not hold a position on the board of directors, and will not exercise voting rights, but may exercise observer rights on the board of directors.

Reasonable Expectations

In the end, many technologies patented by the OTC are never licensed and many of those that are licensed never pay royalties exceeding their patent costs.  Part of this is because the OTC accepts a large percentage of the disclosures it receives for patenting provisionally.  Many universities can risk patenting only the top 10 percent of the technologies they receive as disclosures...or not patent any of them unless a licensee can be found to pay the patent costs.  Moreover, while some technologies are licensed within a relatively short time, others need more time to let the market catch up with the technology.  Sometimes it is the second license negotiation that works for everyone.

This has been a brief overview of the way the OTC team works to license and administer UC technology. Please remember that you are also an important member of the team.  If you have any questions on licensing, give your licensing officer a call.