Industry Licensing

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Technology Licensing as a Path to Commercialization

Industry licensing is an important path to market for many of the inventions developed in the College of Ag. In a licensing agreement, Penn State assigns some of the rights to a technology to an industry partner in exchange for a share in the revenue generated. License agreements are often specific to a particular use or geographic region and may stipulate some performance milestones.

Inventor participation in this process is typically limited, though the inventor may be asked to provide some signatures and otherwise help to facilitate the evaluation and transfer of the invention. If the licensee would like to engage the inventor on any significant level during this transfer process, the University encourages a consulting arrangement between the company and the inventor. Faculty Consulting policies are addressed on the Faculty Consulting Agreements webpage.

If a license agreement is achieved, financial returns, after the deduction of patent expenses, are distributed 40% to the inventor(s), 40% to the Penn State Research Foundation (PSRF), and 20% to the College. If multiple inventors are listed on the disclosure, payments may be divided based on percent of effort. Penn State's IP management policy is outlined on the Management of IP webpage.

A number of contacts and resources are in place to assist with industry licensing efforts, including the Office of Technology Management (OTM) and the College of Agricultural Sciences Entrepreneurship and Innovation (CAS E&I) program. The path toward an industry license will vary case by case, but in general:

It is often appropriate to engage with industry during the early stages of discovery. Input from potential end-users may be useful in shaping research efforts and establishing a discovery's value. Interest from industry will also factor favorably into evaluations as to whether or not to invest into intellectual property protection for the invention. Faculty wishing to engage with industry before a discovery is protected should evaluate the need for non-disclosure and related agreements.
Whether an invention lends itself to patenting or to other forms of IP protection, securing the IP is an important step on the path to licensing. The OTM will be a critical contact in this step, and support is also available from the CAS E&I program. An overview of the IP protection process is detailed on the "Get Started" webpage.
Most inventions need to be evaluated by industry before an agreement is finalized. Penn State enables and supports this process with support from the OTM (and/or the Office of Sponsored Programs if the IP was generated by sponsored research). There are a number of agreements that may be relevant including a Material Transfer/Evaluation Agreement, which governs industry's pre-license evaluation of a technology.
The terms of each licensing agreement are negotiated by the OTM and the potential licensee. Royalty payments, performance milestones, and other details vary case by case. The process is detailed in "An Inventor's Guide to Technology Transfer", along with information about average financial commitments and returns.