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License Agreements with Private Entities
The Office of General Counsel at UT System has developed a model license agreement for UT System intellectual property. The agreement should include, as a minimum, the guidelines set forth below. The model agreement shall be submitted to all potential licensees for UT System intellectual property and individuals involved in negotiating license agreements shall endeavor to use the significant aspects of the model agreement for all licenses of intellectual property rights. It is understandable that under certain circumstances, it will not be possible to include all aspects of the model agreement in the final version of a license.
Granting of Exclusive Rights. No entity shall be granted the exclusive rights to the development and/or commercialization of all intellectual property created at a UT institution without approval of the UT System Board of Regents (Board). Otherwise, agreements should grant rights only on a specific project basis.
Guidelines. The following guidelines apply to license agreements with private entities, including those formed primarily for the purpose of developing and/or commercializing intellectual property created at a UT institution:
- If an entity is granted the exclusive rights with respect to a particular invention, product, process, or other item of intellectual property, the agreement should provide that such rights will revert to the Board in the event the entity fails to diligently develop and commercialize the property within a specified period of time that is appropriate to the particular circumstances.
- An entity that is granted exclusive rights to develop or commercialize intellectual property that is patentable should be required to reimburse the Board for all expenses incurred by the Board in obtaining a patent or, if a patent has not been obtained, should be required to prosecute and bear the expense of obtaining patent protection for the benefit of the Board. In either event, the entity should be required to take all actions necessary, including litigation, to protect and preserve such patented rights from infringement.
- The UT System and its officers and employees should be protected and indemnified from all liability arising from the development, marketing, or use of the particular intellectual property.
- Restrictions on use by the UT System for research and teaching purposes and the publication rights of researchers should be minimized.
- The entity should be required to comply with all applicable federal, State, and local laws and regulations, particularly those concerning biological materials and necessary testing and approval by the Food and Drug Administration.
- The entity should be required to maintain confidentiality with regard to any unpatented technology or know-how.
- An entity that grants a license or sublicense to some other entity for property or technology that is in whole or in part derived from or based on that which is licensed to the entity by the Board, should be required to share with the UT System: 50% of any royalty received by the entity and 50% of any equity position to which the entity may be entitled.
- License agreements should contain other such provisions as may be determined to be in the best interest of the UT System by UT System’s Office of General Counsel.
Sponsored Research Projects
UT institutions and individual faculty are encouraged to use reasonable efforts to obtain sponsored funding for research projects from governmental agencies as well as nonprofit and for profit nongovernmental entities. Each UT institution should establish an appropriate organizational structure to solicit sponsors for research projects and to negotiate appropriate agreements with such sponsors with the assistance of UT System’s Office of General Counsel as provided below.
Model Agreement. While it is recognized that sponsored research agreements with governmental entities and some nonprofit entities are not normally subject to change through negotiation, the Office of General Counsel has developed a model sponsored research agreement that the UT institution shall submit to all other potential sponsors for research projects.
Guidelines. It is particularly important that the following guidelines be adhered to if at all possible in sponsored research agreements:
- The UT System Board of Regents should own the rights to all patentable discoveries, unpatentable technology, technical know-how, and other intellectual property that results from the research project.
- The sponsoring entity may have an option to negotiate for either an exclusive or nonexclusive right to a license to develop and commercialize any intellectual property resulting from the project for a royalty in an amount to be negotiated.
- In the event the sponsor exercises its option to negotiate a license, it should be required to reimburse the UT System for all expenses incurred with respect to a patent that has been secured on any patentable discovery or, in the event a patent has not been obtained, the sponsor should be required to bear the expense of securing patent protection for the benefit of the Board.
- The rights of researchers to publish scholarly work with respect to the research project should be restricted only to the extent necessary to protect the potential value of any discovery resulting from the research.
- The agreement should contain appropriate indemnification from the sponsor for all damage or liability that may result when a research project involves the use of materials, processes, or procedures that are furnished by or required by the sponsor to be used in such a project and such damage or liability is not due to negligence of the persons performing the research.
- License agreements that result from the exercise of options in the sponsored research contracts are subject to approval as set forth in the intellectual property policies and guidelines and should contain the provisions set forth in the model license agreement provided by the Office of General Counsel, pursuant to the policy statement and guidelines for agreements licensing UT System Intellectual Property.
Technology Transfer Offices (Centers)
The UT System Board of Regents finds that intellectual property and technology created at the UT institutions are valuable assets with potential for commercialization for the benefit of the citizens of the State, State government, the UT institutions, and the UT System. Currently existing technology transfer offices shall constitute "Centers" as defined in Texas Education Code Section 153.001(1). UT System Administration and any UT institution that does not have a Center is authorized to create one.
Approved Activities. Such Centers may continue to perform the activities set forth in Texas Education Code Sections 153.004(1), (2), (3), and (4) and Section 153.006 in accordance with the intellectual property rules, these and other intellectual property guidelines, and all other relevant Board policies.
Centers may also engage in activities set forth in Texas Education Code Sections 153.004(5), (6), (7), and (8) in accordance with the intellectual property rules, these and other intellectual property guidelines, and all other relevant Board policies, provided however, that institutional ownership interests in such entities established and operated pursuant to Section 153.004(7) shall belong to the Board.
Centers may institute and operate programs as described in Texas Education Code Section 153.005(a) in accordance with criteria required to be established by UT institutions and approved by the Board, as set forth in Section 153.006, and in accordance with the intellectual property rules, these and other intellectual property guidelines, and all other relevant Board policies.
Reporting. UT institutions shall provide the information required and other such information as may be necessary or desirable to evaluate the success of technology commercialization throughout the UT System.
Procedures. As a part of its Handbook of Operating Procedures, each UT institution shall adopt procedures, with appropriate involvement of the Office of General Counsel, for identifying, evaluating, and marketing intellectual property and technology created at the UT institution:
- that is not already subject to an option or license pursuant to a sponsored research agreement;
- that has not been committed to an entity, including those formed for the primary purpose of development and commercialization of intellectual property created at the UT institution;
- or the control of which has been regained by the UT System through reversion provisions contained in the license agreements.
Disclaimer: The materials on this website do not constitute legal advice. You should consult with an attorney before acting on or conveying any interpretation of these materials.