Technology Licensing Process

If you identify a technology you are interested in pursuing, contact the OTC to start the commercialization process. The first step in interacting with our office is signing a confidential non-disclosure agreement (CDA), which guarantees that the transfer of intellectual property between the two parties is confidential. OTC also recognizes that in some instances industry partners may want to have preliminary non-confidential discussions prior to signing a CDA. OTC staff and the inventor will provide when possible other non-confidential information to assist the industry partner to better assess the technology.
 
After a CDA is signed, OTC will negotiate a deal that is a win-win for all parties involved. Compensation can take various forms but is usually some combination of a cash fee, patent expense reimbursements, royalties and equity. Other variable licensing terms include exclusivity, fields of use, duration, sublicensing rights and required diligence milestones. Sample term sheets and agreements may be seen in the Forms for Industry section.
 
OTC standard template agreements expedite the execution. Customizing the legal terms or language in the template agreement will require an extensive legal review process by the university's legal counsel and UT System, often increasing the time to execute a final agreement.
 
If the invention is a software application or trademark then customized agreements will used. In addition, agreements for cell lines and other inventions that are typically non-exclusive licenses also have a customized template.

Technology Licensing FAQs

Does the University sell intellectual property rights to third parties?
In accordance to UT System Board of Regents policy, the university grants licenses to practice, manufacture, sell or otherwise use certain intellectual property.  The university does not have legal authority to assign a patent or otherwise sell intellectual property.
 
How long does it take to negotiate a license?
It is possible to negotiate terms and execute an agreement in less than 5 business days, but more commonly, the process takes a couple of months. To expedite the process, the university's legal counsel has provided standard template agreements leaving the business terms, such as compensation, open for discussion. If a partner, however, is unable to accept legal terms or conditions stated in the standard template, a more extensive legal review process will be required which lengthens the time to an executed agreement.
 
What kind of financial terms are included in a license agreement?
Financial terms vary for each license agreement. Compensation is usually a combination of a cash fee, patent expense reimbursements, royalties and equity. OTC designs these compensation schedules in collaboration with the industry partner as part of an open discussion on the business plan for the technology to be licensed. 
 
Can equity be included in a license?
Yes. The University frequently receives an equity stake in a new venture licensing University technology. While almost any type of ownership stake is acceptable, the University will expect a reasonable exit opportunity.
 
Who owns intellectual property created at the university?
Intellectual property either developed within the course and scope of university employment of the individual or resulting from activities performed on UT System time, or with support of State funds, or from using facilities or resources owned by the UT System or any of its universities (other than incidental use) is automatically owned by the Board of Regents. All matters relating to the ownership and reporting of intellectual property and the distribution of income from intellectual property are governed by the UT System Board of Regents' Rules and Regulations ("Regents' Rules") 90101.Intellectual Property, Preamble, Scope, Authority.