Standard License Agreement
This document outlines the terms normally contained in Simon Fraser University (SFU) licenses and the conditions under which licenses are granted:
- SFU has a mandate to educate, undertake research and positively impact the local and Canadian community. SFU's Innovation Office (IO) works with its researchers and outside companies to transfer technology into the marketplace to improve the Canadian economy. By policy and precedent, the University and its researchers have an expectation to negotiate a share of the proceeds of eventual commercialization.
- In cases where a company wishes to obtain rights to undertake commercialization of an
SFU technology, a License Agreement is the usual legal instrument which
sets out the relationship. The function of the IO is to facilitate the
licensing process and assist with closing deals in a timely manner.
SFU is prepared to grant rights for use of SFU technology via an exclusive license or a non-exclusive license. An option agreement may be negotiated where a company wishes to enter into a license agreement at a later date.
Intellectual Property (IP)
Sometimes an exclusive option agreement precedes a full license. In this manner, the company does not need to commit to the license and related performance terms until it has a chance to convince itself of the market potential. Upon payment of an option fee, the company is granted a time limited option to acquire a license under negotiated terms. During the option period, the company has an exclusive opportunity to understand the technology and its market potential as well as work with the University to create a product line. At any time during the option period, a formal license can be negotiated.
License Agreement: SFU and its researchers will provide rights to use a selected technology for research and development, product development, manufacture, use and sale.
Degree of Exclusivity: The company can acquire exclusive or non-exclusive rights to the technology to use it in defined markets. In the former case, one license is granted. In the latter case, the IP owner may license other companies.
Usually, rights are restricted to the market applications where a) the company already has a track record or b) it has the resources to launch new products or services based on the technology. Rights to grant sublicenses to others are usually provided under both types of licenses.
Improvements and New Discoveries: As commercialization proceeds, the SFU researchers may make improvements to the technology. Normally, these are made known to the company and may be placed in a license for no additional compensation.
Sometimes the researchers make new discoveries (i.e. related to the technology, but which may greatly expand its scope in the marketplace, perhaps outside the markets in which the company has a declared interest). In this case, the company is informed of the new discoveries which may be negotiated into a license for additional compensation.
Performance Milestones: Depending upon the level of exclusivity negotiated, SFU will require commitments from the company in the form of performance milestones defined in terms of measurable events within the company's own commercialization plans.
Compensation to IP Owners: Compensation will be a function of the performance milestones, the degree of company commitment, and the degree of exclusivity granted. There will be a license sign-up fee with royalty rates negotiated on the basis of industry standards. Royalty rates are expressed as a percentage of sales by the company in the market where it has rights.
Collaborative activities: Continuing collaborations between the company and SFU researchers are encouraged during the commercialization phase and usually take the form of a research contract to perform work at SFU as part of the corporation's commercial plans. The research contract budget includes allowances for both direct and indirect costs.
Patent activity: If the technology is covered by SFU patents, these will be licensed to the company, usually with ongoing maintenance costs paid by the company. The company may seek additional patent coverage and SFU will participate in all aspects of the application. If there is evidence of a patent infringement, SFU will collaborate with the company, but expects the company to lead and pay for any necessary action.
Indemnification and Warranties: SFU expects the company to indemnify the University from any negative repercussion of the company's activities in the marketplace and may request that product liability insurance is in place. Naturally, SFU is unable to provide any warranties with respect to suitability for the markets, etc. For more information, see an article published in Research Links.
Companies looking for new product opportunities will find the IO ready to assist them.
For more information, please consult one of the IO Technology Managers listed in our Directory.