Minnesota Method - University Industry Partnerships

© 2014 Regents of the University of Minnesota. All rights reserved.

New Models of University‐Industry Partnership:"MN‐IP Create" and "Try and Buy" Programs

Rick Huebsch, Associate DirectorLeza Besemann, Technology Strategy Manager

Office for Technology Commercialization 2© 2014 Regents of the University of Minnesota. All rights reserved.

Agenda• UMN research enterprise• “Making it easier to do business with the U”

• Minnesota Innovation Partnerships (MN‐IP)• MN‐IP Create• MN‐IP Try and Buy

• Express Licensing


Research Enterprise• $693M total • $47.7M business and industry

• Stable over past 5 yrs.• Ranked 9th ‐ public institutions

• By total R&D expenditures


Technology Commercialization

FY2013

Invention disclosures 331

New U.S. patent filings 148

New licenses 91

Startups 14

Gross revenues $39.5M

Current revenue generating agreements 331


Partnering with UMN

Hire students Sponsor research Consulting

License Technologies

Consortia and Centers

Testing Services, Facilities,

Instrumentation


Myths • Too difficult to do business with universities• Negotiations take too long• Large upfront payments for unproven technology• Uncertain financial obligations• Licensing terms are unreasonable

• More than industry is willing to pay• Don’t understand industry’s needs and expectations


What Industry told us…• Make it easier to do business with the University

• Eliminate protracted negotiations about IP terms• More self‐service, more/better information online

• Eliminate the uncertainty in future financial obligations • Define the licensing terms in the research agreement

• Want exclusive rights to the IP• Eliminate concerns that competitors will license the IP that

results from research company funded• Make it easier to evaluate and license IP

• Minimize financial risks for licensing unproven technologies


What Researchers told us…• Make it easier to do business with the University

• Eliminate protracted negotiations about IP terms• More self‐service, more/better information online

• More marketing of more of my technologies• Don’t focus only on direct marketing a chosen few• Greater use of online methods

• Help me transfer copyrighted IP • Different than classic patent licensing• Often many non‐exclusive licensees for same technology


Innovative Approaches Needed• Open and transparent

• Published fees and licensing rates• Streamlined negotiation

• No hidden fees• Terms known before negotiations begin

• On‐line, most information readily available on web• Research agreement templates• Licensing terms

• Self‐service• Express licensing – credit card transactions

Increase number of transactions with industry


Minnesota Innovation Partnerships (MN‐IP)

University of Minnesota’s game changing approach to Intellectual Property (IP) terms for industry sponsored research and licensing agreements

• MN‐IP Create – For creating new IP via sponsored research

• MN‐IP Try and Buy – For licensing existing IP


Minnesota Innovation Partnerships

INDUSTRY

Sponsored Research

Technology LicensingMN‐IP Try and Buy

MN‐IP Create

Created IP

License fees $$

Research Funding $$$

Existing IP


MN‐IP CreateTwo options for establishing intellectual property rights through a sponsored research agreement

• Option A: Created to remove uncertainty and financial concerns that often surround industry‐funded research projects in a university setting

• Option B: For those sponsors who do not wish to pay an upfront fee and wish to await creation of IP before negotiating terms

• 6 month option period


MN‐IP Create – Industry Only• For‐profit companies

• Pay full overhead rate for the research project

• Not eligible• Non‐profits• Companies that don’t pay full overhead rate• Government (federal or state) funded research that may flow

through a company (i.e. sub‐award)• Consortia agreements


MN‐IP Create Option A• Pre‐paid exclusive option fee

• 10% of sponsored research contract or $15k, whichever is greater

• Option to exclusive license with pre‐set terms• No annual minimums• No time limits or milestones• Sponsor is free to sublicense/cross license• If annual net sales ≥ $20M, 1% royalty on total annual net sales• $5M royalty cap if IP improves sponsor’s existing product/process

• Company pays patent costs and controls patent process • While collaborating with the University on patent strategy


Example • Option A Upfront Option Fee

• If research budget $100k, pay $15k fee• Total cost for research and option fee: $115k

• If research budget $250k, pay $25k fee • Total cost for research and option fee, $275k

• Royalties due• Annual net sales <$20M – no royalties due ($0)• Annual net sales $40M, owe $400k royalties


Who owns the IP?• Developed by UMN UMN owns• Jointly developed jointly owned• Sponsor developed sponsor owns

• Industry sponsor does not own all the IP resulting from the research agreement


How is Background IP handled?• University Background IP inclusion into the program is at the discretion of the University

• If not included, the University may decide to enter into a separate licensing agreement prior to the research agreement


MN‐IP Program Expansion

“MN‐IP Try and Buy lets companies more easily explore university research and bring cutting‐edge technology to the market. The program encourages partnerships that create new possibilities in innovation and boost our economy. It’s a win not only for industry and the university, but for the state as a whole.”

• Jay Schrankler, executive director, Office for Technology Commercialization

• Build on theme of “Making it easier to do business with the U”• MN‐IP Try and Buy


MN‐IP Try and BuyTransparent, industry‐friendly IP license for existing technology

• Try: Exclusive Option with low, single fee• No U.S. patent expenses due• $0 for MN companies

• Buy: License with pre‐set terms – published online• Low, published royalty % • First $1M sales are royalty‐free• U.S. patent expenses due only when patent issues• Discount for MN companies


MN‐IP Try & Buy• Includes a majority of licensable technologies (hundreds)

• Excluded: exemplary technologies

• Standardization of which terms & conditions apply• But not one‐size fits all terms• Each eligible technology can vary by Try period, royalty %

• Positive response externally and internally• Industry: simpler, more transparent, lower up‐front risk• Researchers: more technology offered to companies• Licensing managers: simplifies, streamlines negotiation


license.umn.edu


license.umn.edu


Express Licensing – “Buy Now”• Growing category of non‐patented IP

• Software, assessments, models, research tools, horticulture

• Multiple customers, typically low, one‐time fee

• Focused on quick transaction, 100% online zero‐touch1. Read information2. Complete licensing transaction3. Complete payment (credit card)4. Download/fulfillment of materials

• History: built UMN‐only proprietary web solution ….• Based on other universities’ interest, company was formed (now Nouvant) to host all via software‐as‐a‐service (SaaS)


license.umn.edu


license.umn.edu


Key Learnings• Open and Transparent

• Published fees and licensing rates• Streamlined negotiation

• No hidden fees• Terms known before negotiations begin

• On‐line• Information readily available on web

• Self‐service• Express licensing – credit card transactions

Increase number of transactions with industry

Office for Technology Commercialization 27

Minnesota Innovation Partnerships (MN‐IP)and Express Licensing

Available Technologies: http://license.umn.edu/

For more information on MN‐IP http://www.research.umn.edu/techcomm/industry‐sponsor.html

Leza BesemannTechnology Strategy [email protected]

Rick HuebschAssociate [email protected]

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© 2014 Regents of the University of Minnesota. All rights reserved.