Technology Licensing Agreement

Tla

Intellectual Property (IP) developed by the U.S. Department of Energy’s (DOE) national laboratories is typically held by the national laboratory and licensed by working with the responsible technology transfer organization within the laboratory where the technology was developed. Because of the unique set of laws related to IP generated at DOE laboratories, licensing agreements for these technologies include some provisions that may not be present in a license agreement between private entities (e.g., march-in-rights, government-use rights, and indemnification of the federal government). Learn more in the licensing guide.

Typical financial and milestone terms present in a commercial license include:

  • An issue fee, which is non-refundable and due upon execution of the agreement
  • A running royalty, which is most commonly based on a percentage of sales
  • A minimum annual royalty
  • Other financial terms appropriate to the technology and market, such as milestone payments and patent cost reimbursements
  • Equity ownership terms which may be negotiated in some cases in lieu of cash payments
  • Milestone commitments for development (e.g., alpha & beta products) and introduction of commercial product in marketplace Licenses may be exclusive for a particular field of use or geographic region, or non-exclusive.

Most of the technologies available for licensing will require additional development before they are commercially viable. An Option Agreement is available that protects an entity’s right to license a technology at a future time. Option Agreements are generally available for a time period of one year. Many labs will approve an extension to the Option Agreement if sufficient milestones toward making the technology commercially viable have been met. Several of the technologies available for licensing can be found on the Lab Partnering Service. These technologies can be viewed under the ‘Lab Technologies’ tab as marketing summaries, which provide business friendly descriptions of the technology, or the patent itself via the Visual Patent Search. Online contact forms are provided to get directly in touch with the licensing representative from each laboratory through ‘connecting’ with the relevant expert.

Info Description: Businesses or other non-federal entities license lab technologies.
Uses Typical Uses: For commercializing a Lab prototype technology
Advantages Advantages: Enhance your technology product or service offering with a federally-funded invention
Coin Cost: Licensee pays a non-refundable fee, royalty or other form of compensation.
Info Footnote: Licensing Guide - https://www.energy.gov/sites/prod/files/2015/01/f19/LicensingGuideFINAL.pdf
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Ins and Outs of Agreements & Licenses

CRADAs, SPPs, and ACT arrangements can be contracted to contain provisions addressing protection of a partner’s proprietary data. User Agreements often include such provisions as well. In addition, Nondisclosure Agreements (NDA) can easily be put in place to protect a partner’s proprietary information prior to the initiation of any work or even at the discussion stage if necessary. While a company’s proprietary information agreement template can be used as a starting point the nature and contractual requirements of the national laboratories will require amendments and the use of the standard agreement offered by the laboratory of interest often expedites the signature of these agreements. Data generated in the performance of a CRADA can be protected from public release by the laboratory or the Government for five years. It is important that companies mark all of the information that they provide to the laboratories’ staff in accordance with the agreements between the parties for protection of data. Data generated under an SPP or ACT can be kept proprietary by the Sponsor indefinitely in many cases.
Retention of these rights in agreements involving federally-funded research is required by law. The government license is viewed as recognition of the Government investment that created the facility and the research from which the technology arises. March-in rights are retained by the government to assure that technology arising from laboratories is made available to the public. Should a laboratory licensee or CRADA partner abandon use or dissemination of the technology yet retain a license to the technology, the government has the right to require the partner to license to a third party, who is interested in commercializing the technology, at a reasonable royalty.
There are examples of successful multi-party collaborations that accommodated the interests of various organizations, including multiple DOE laboratories. Clear communications and up-front negotiations of intellectual property rights can help save time. For example, in the alternative feedstocks for chemicals program, five laboratories set up agreements for sharing intellectual property among themselves and with a company. The intellectual property developed by one laboratory was used by other laboratories, and the company benefited from inventions at several laboratories.
Although as federally-funded facilities, DOE’s national laboratories have a preference to license to U.S. companies and an obligation to consider U.S. Competiveness in all license agreements. The requirement for U.S. Competiveness can be satisfied by either substantially manufacturing in the United States or by having a business unit in the United States and providing a significant economic and technical benefit to the United States. All DOE Laboratories are also required to include an export control clause in their license agreement. This clause simply states that the Licensee agrees to comply with export control laws designed to protect items and information important to the United States. It restates the existing requirement and does not impose additional requirements.

Additional Ways to Partner with a National Lab