Business Lead Expectations
Becoming a business lead for one or more of The Ohio State University technologies is an exciting opportunity and one that requires significant time, effort, and professionalism. Often, multiple business leads may be considering the same technology. When this occurs, TCO determines the most qualified business lead based on the information that each business lead provides to TCO.
New Venture Process for a Business Lead:
|Initial meeting with New Ventures||CDA put in place|
|Meeting with inventors & Licensing Officer||Due Diligence shared w/ Licensing Officer|
|Business & Tech Commercialization Plan||License Negotiations w/ Licensing Officer|
|License Execution w/ Licensing Officer||License Compliance|
Minimum Expectations of a Business Lead:
Business Case Overview:
Provide the TCO (including Licensing Officer and New Ventures) a CONCISE business vision for your product. Information we will be expecting:
- Value Proposition: What value is the technology startup going to bring to the market? How is the technology different than the competition or closest substitute?
- Questions to answer: Who is your initial (and secondary, if any) customer? Is the end-user different from the customer? Ultimately, how does the company make money?
Business/Technology Commercialization Plan*:
Your technology commercialization plan is critical for the negotiation and execution of the license agreement. The following will be required documentation before a license negotiation can begin:
- Actionable and Measurable Milestones for Technology Development
- This includes each capital raise required to get to first sale
- Note: milestone fees may apply as well
- Financial Projections
- Include a 5 year Projection
- Support your Financials with Assumptions and Identify Funding Sources
- Include Working Capital, Patent Prosecution, and Fixed Asset Requirements
- Competitive / Market Analysis
- Identification of the Competition
- Market OpportunityTechnology Development Plan
- Additional / Supplemental Research
- Regulatory Pathway, Production / Manufacturing
- Funding Requirements / Sources
- Other Customary Information as Required
*Should an inventor of the Technology you seek to license from The Ohio State University have an equity interest in your company of 5% or greater, the company must be qualified as a University Technology Commercialization Company (UTCC). This requires a separate approval process within the university.
License Agreement FAQ’s
Business and Economic Terms
Q: Are upfront fees required to obtain a license from the University?
A: Generally, yes. In order to allow startups to focus their capital resources on activities that promote the commercialization of the technology, the University may waive payment of an upfront license fee in exchange for issuance of equity to the University, or other economic consideration designed to capture the value of the technology for the University.
Q: Are payments of past and ongoing patent prosecution expenses required to obtain a license from the University?
A: Yes. Although the University startups must make provision to pay past and ongoing patent prosecution expenses for the licensed patents. Most patents are the result of substantial research by the University. It is essential for the ongoing commercialization efforts of the University that it recoups these amounts so that they can be reinvested in the protection of other inventions.
Q: Will the University accept stock in consideration for grant of a license?
A: Yes. Equity is often a key component of the compensation for the patent license and company formation services provided by the University to startup companies. Issuance of equity to the University can lower the royalty and fixed fees payable under the license and can serve to more closely align the interests of the University and the startup.
Q. What is the purpose of the milestones and the University’s termination rights in the license?
A: The mission is to get inventions into productive use in society and maximize revenue to the University. This is first achieved by setting meaningful milestones to ensure commercialization of the University’s intellectual property. Since the University has a mandate that its inventions be developed in the interest of the public, it uses these milestones to gauge the progress of the licensee to ensure that the intellectual property is being actively commercialized. If an exclusive licensee fails to commercialize the intellectual property, the University must have the ability to take the rights to the intellectual property back and find a better commercialization partner. The use of milestones encourages the University to take calculated risks on start-ups and small businesses because the license agreements have reasonable termination mechanisms if the business plan does not prove to be successful.
The use of milestones for license agreements with companies that are not start-ups ensure that the companies are not just “parking” the intellectual property, but are diligently trying to commercialize the intellectual property. Termination mechanisms in the license are used with great caution, and as long as a licensee is making all required payments on a timely basis, diligently pursuing commercialization of the licensed patents, and otherwise complying with the provisions of the license, the University will consider a restructuring of the agreement if milestones in the original license have not been met for reasons other than failure of the licensee to exercise diligence in the commercialization of the technology.
*The FAQ’s for License Agreement Business, Economic, and Legal Terms can be found here.