Industry Funded Projects with Flexible Solutions for Intellectual Property
ISU offers three options for industry sponsors who may desire different degrees of control over intellectual property developed during an SRA, provided the principal investigator and department chair at ISU agree to their use. These three Flexible Solutions for Intellectual Property are outlined below.
Flexible Solution A – Traditional IP terms – Exclusive royalty-bearing license
Flexible Solution A is the traditional academic approach where ISU owns the intellectual property it develops during a project, or shares ownership with a project sponsor of intellectual property if the invention is jointly developed during a project. With ISU controlling the patenting process, the project sponsor receives a non-exclusive license to patented intellectual property arising from the project. Additionally, the sponsor receives a time-limited option to negotiate a royalty-bearing license to the patented intellectual property when Sponsor reimburses patent-associated costs. ISU retains the right to publish the results of the research project.
Flexible Solution B – Managing IP Financial Risk – Threshold sales trigger royalty payments in exclusive license with prepayment
Flexible Solution B provides a sponsor with the opportunity to define and manage upfront its financial risk associated with the royalty-bearing exclusive license. In the license agreement, no royalties will be incurred until twenty million dollars of net sales of the licensed intellectual property in a single year occur. Once that level of sales is met, royalties paid until the expiration of the IP. In the research agreement, an additional upfront fee payment equal to ten percent of the total project costs (or $15,000, whichever is greater), is payable along with the normal project costs. Flexible Solution B is a ready to sign research agreement, thus avoiding negotiation time of the parties, and allowing research to begin quickly. The exclusive license agreement is negotiated after research begins. ISU retains the right to publish the results of the research project.
Flexible Solution C – Industry Ownership of IP – Assignment with prepayment
Flexible Solution C provides a sponsor with the ability to own the project intellectual property. There is an upfront payment equal to seventy-five percent of the total project costs in addition to the normal project costs payable in the research agreement; in turn ISU agrees to assign the project intellectual property to the project sponsor. The university retains the right to publish the results of the research project.