Commercializing Research Results

1. The Role of the Office of Technology Transfer

One of the primary goals of the Office of Technology Transfer (OTT) is to enter into royalty-producing license agreements, i.e., contracts allowing companies to make, use, develop and/or sell Temple-owned inventions. With this aim, OTT is constantly refining marketing surveys which have the dual purpose of establishing the commercial value of the invention and of locating potential licensees. All of this information is shared with the inventors on a regular basis.

Once potential licensees are identified, OTT and the inventors collaborate on a variety of activities designed to bring about a license agreement: Development of materials describing Temple technologies available for licensing, mailings to companies individually targeted for each invention, visits to Temple by company representatives, attendance by OTT staff at technology transfer meetings, etc.

In pursuing its mission to license Temple-owned inventions, OTT is continually expanding its corporate R&D and marketing contacts. These contacts are also be used to make companies aware of the resources in faculty expertise and in laboratory or instrumental facilities at Temple. An important new goal is to develop research partnerships or consulting arrangements with companies, even where no Temple invention exists.

2. The Role of Inventors

Inventors' contributions to Temple's technology transfer effort usually go far beyond being the creators of the inventions. They are frequently asked to perform additional research, either to assist a potential licensee evaluate the invention or to contribute to the development of a product already under license. In addition, inventors may have long-standing relationships with company scientists who have similar research interests. Thus, inventors may be able to identify very early on companies interested in licensing their inventions. Such relationships have led to several of the license agreements currently in place and are expected to continue to do so in the future.

The importance of the inventors' role in all of OTT's activities cannot be overemphasized. OTT recognizes this and endeavors to involve inventors closely in the development and day-to-day implementation of the overall strategy to market their inventions. Inventor involvement is especially critical when further research is a component of the contemplated license agreement. However, it is also important that inventors recognize that their dealings with companies may lead to awkward situations if some care is not taken. Typical problems include premature disclosure of confidential information and agreeing to contractual terms without clearance from OTT. Just as inventors have the technical expertise regarding their inventions, OTT staff has expertise in marketing and negotiating the best possible terms. Optimum results, both in obtaining continued support for the inventors' research and in securing royalty income, will be achieved only through the coordination of efforts by inventors and by OTT staff.

3. Legal Review of Agreements

Inventors accustomed to research grants from agencies such as NSF or NIH often do not realize the very real legal dangers (both to themselves and to Temple) in even simple research agreements proposed by corporate sponsors. In the vast majority of cases, a contract provided by a company includes clauses which give every advantage to the company, and often restricts the inventor in subtle ways. It is common practice that such unbalanced clauses are subject to change through negotiation. The role of the Office of the University Counsel is to assist OTT in protecting your rights as well as those of Temple by reviewing all proposed agreements. Important legal issues which must be carefully considered in every agreement include (among others): product liability, publication rights, and inventorship and ownership rights to future inventions.

Inventors do not have the legal authority to sign any contractual agreement for Temple. Any agreement with a company must be reviewed first by OTT and then by the University Counsel's Office to protect the interests of the inventor and of Temple. Only then will it be signed on behalf of Temple by the Vice President for Financial Affairs (in addition to the President, the only individual with legal authority to sign on behalf of Temple).

4. Confidentiality Agreements

A confidentiality agreement (also commonly referred to as a secrecy agreement, a confidential disclosure agreement, or a non-disclosure agreement) is a contract between Temple (through the inventor) and a third party. The third party is usually a company that requires very specific information about the invention in order to determine its interest in supporting further research or in licensing the technology.

A Confidentiality Agreement limits the use by the company of technical information about a particular invention. In order to provide protection, however, this document must be signed by the company before discussions which are confidential in nature take place. OTT is responsible for drafting the appropriate agreement and for coordinating its execution. Once the agreement has been executed, OTT informs the inventors that confidential information may be communicated. The scope of such agreements is usually quite narrow, so that more than one agreement may have to be executed for the same inventors and the same company. Confidentiality agreements may be either one-way (protecting Temple information) or two-way (protecting both Temple and company information).

When in doubt concerning the need for confidentiality, inventors should consult OTT staff. Under no circumstances should copies of pending patent applications or of critical unpublished manuscripts be sent to companies without clearance from OTT. Even with an agreement in place, it is important to label as "Confidential" all written communication of confidential information; oral disclosures must be reduced to written form and sent to the company within thirty (30) days of the disclosure date.

5. Materials Transfer Agreements

While confidentiality agreements protect not only information but samples of materials as well, materials transfer agreements may be used when providing only materials for research use. These agreements are structure in such a way that they may be generated by the inventor without OTT or other University involvement, Please note, however, that materials transfer agreements allow the recipient to use the material for research purposes only.

6. Research Agreements

Research agreements may cover areas of investigation of common interest to the faculty member and to the company, even where a Temple-owned invention does not exist. In the absence of an existing Temple invention, a research agreement pertains to work based on an original idea or preliminary results of a Temple faculty member. The results of the research always belong to Temple, although the company usually has an option to obtain an exclusive license to them (see below).

[By contrast, so-called "testing" agreements (such as drug studies) are based on commonly accepted ideas or on a protocol provided by the company, in which case the results belong to the company. Since no Temple-owned inventions arise from them, testing agreements are not handled by OTT; you should contact Richard Smith on the Main Campus [(215) 204-3560 or v2153a@vm.temple.edu] and Kenneth Geller on the Health Sciences Campus [(215) 707-7547 or kgeller@astro.ocis.temple.edu] ].

A research agreement sets forth the terms and conditions for research sponsored by a company. It describes the research to be done, the time period, and the level of support being provided; however, just as importantly, it outlines ownership, publication, and other rights regarding any new inventions which may develop as a result of this support, as well as confidentiality, and important questions of liability. It is important that, while discussing a potential research agreement with a company, inventors make clear to the company that indirect costs and the non-technical terms of the agreement will be handled by OTT.

In order to expedite setting up new research accounts, inventors are urged to send OTT a copy of the proposal (including a line item budget) and a completed SPAF Form (which may be obtained from department administrators or from Sponsored Projects) , as they would for an NSF or NIH grant. The Office of the University Counsel will review research agreements only when accompanied by this form (signed by all appropriate individuals) and only when forwarded through OTT. Use of company funds without an executed agreement will entitle the company to dictate later any reasonable terms it wishes; for this reason, the Vice Provost for Research does not allow access to company funds until an agreement is executed.

7. Option Agreements

An option, if exercised, gives the company the right to negotiate a license to commercialize the technology covered by the option. The wording of the option agreement is critical because the duration and breadth of an option may vary widely. The agreement may include key provisions of the license to be negotiated; it does not, however, commit either the company or Temple to a license. The company uses the period during which the option is valid (usually one year) to assess, often based on the results of further research being sponsored, whether it wants to license the invention.

The "right of first refusal" is frequently used in conjunction with options; it insures that another company will not receive a more favorable offer from Temple, in the event the license negotiations are unsuccessful.

Options may be combined in the same agreement with a research component, as mentioned above, or be stand-alone agreements covering existing Temple technology.

           8. License Agreements

A license agreement is a contract between Temple and a company that wishes to make, use, develop and/or sell a Temple-owned invention. The license agreement contains terms which establish royalty rates, license fees, liability insurance coverage, publication rights, and other critical provisions.

Negotiations for a license agreement typically progress in two main stages, according to a strategy which coordinates the efforts of the inventor and those of OTT staff. In the first stage, the inventor discusses with the company (under a Confidentiality agreement) the technical aspects of the invention and of the proposed commercialization, until a clear picture of what is intended has emerged. If the License Agreement is to contain a research component intended to develop the invention, the inventor also clarifies with the company the scope of the work to be performed and the funding needs. Throughout this stage OTT is kept informed of the progress but plays only a minor role.

The second stage consists of negotiations between OTT, representing Temple and the inventor, and the company for the commercial terms. Before negotiations start, OTT staff meets with the inventor to discuss the desired terms and any other goals, and to map out a negotiating strategy. OTT staff will then meet with company representatives (sometimes marketing and legal staff together) to negotiate the terms of the agreement. The inventor is kept informed of the progress of the negotiations and is consulted before any critical decisions are made. After all, Temple and the inventors share the net income equally!