Office of the Vice President for Global Communications

Monday, March 19, 2012

U-M simplifies license agreements for industry research partners

As part of a plan to enhance research partnerships with industry, U-M has announced it will offer sponsors the opportunity to negotiate the terms for licensing intellectual property upfront during the initial contracting process for major research projects, rather than waiting until after IP has been created.

“Industry has a great appreciation for the creative potential of our faculty and students,” says Daryl Weinert, executive director of the Business Engagement Center. “This approach allows our partners to determine the terms and obligations for licensing any potential discoveries from their investment upfront as they enter into a research agreement.”

Dubbed the Michigan Research Advantage IP Program, the approach applies to research agreements of at least $250,000 annually and spanning a minimum of three years. With the consent of the faculty principal investigator, the sponsors will have the option to obtain an upfront negotiated license for intellectual property developed under the research contract.

The license may follow one of two different formats:

• An upfront payment with a future payment after significant sales have occurred.

• An upfront option fee with prenegotiated financial terms that may include annual payments, or more traditional licensing terms such as royalties on sales.

“These choices can be flexible and creative, taking into account the sponsor’s interests, the industry and the type of research being funded,” says Ken Nisbet, executive director of U-M Tech Transfer. “Overall, a key goal is to meet our partners’ need for predictability in their business arrangements.”

The new approach to research programs is among the changes implemented under the auspices of a broader Michigan Research Advantage Program created to facilitate and expand ties to industry. For example, the university’s Office of Research and Sponsored Projects — the group that negotiates research contracts — is reviewing and refining its processes to provide faster, more responsive service for industry partners.

Just five years ago, U-M launched the Business Engagement Center as a “front door” for companies seeking access to university expertise and other resources. Along with its affiliated offices in the College of Engineering and the Medical School, and at the Flint and Dearborn campuses, the BEC now maintains relationships with more than 1,000 companies. It is contacted by nearly 200 new companies each year.

“Our connections with industry are a two-way street, and they are critical to our mission as a research university,” says Stephen R. Forrest, vice president for research. “Not only can we help industry meet its fundamental research needs, but working with industry partners on the challenges they face richly informs both our research and educational activities.”