Innovator’s Guide

During disclosure, the inventors provide a description of the technology and an explanation of the critical solution it could provide to benefit society by submitting an invention disclosure form online. Submitting this information creates a record of the invention (descriptive information), the inventor(s) involved, who sponsored the work, and public disclosures and publications. For inventions coming out of a particular principal investigator’s (PI) laboratory, the PI’s authorization is required even if the PI is not an inventor.

Disclosures received by Tech Licensing are assigned a UFID number and assigned to a specific licensing officer and licensing associate for management. This licensing team is responsible for all actions relating to the docket going forward.

The licensing team will meet with the inventor(s). Together they will discuss the invention and make a preliminary evaluation of manufacturing feasibility, patentability, novelty, potential applications, and possible markets. Because patenting an invention is expensive, sometimes the licensing officer decides not to pursue the commercialization of an invention. If the invention is pursued, a preliminary licensing strategy will be developed.

At this stage, the inventors may assist in the evaluation by participating with a prior art search. Tech Licensing also welcomes the inventors’ suggestions for the best strategy for licensing the technology (e.g. exclusive vs. non-exclusive).

Different inventions require different licensing strategies. For example, a basic new scientific tool that is likely to be widely used is typically licensed on a non-exclusive basis. In contrast, an invention which requires significant investment of resources by a company is typically licensed on an exclusive basis. The exclusive license provides the licensee with an incentive to undertake the risky capital investments and commit the resources required for product development.

Tech Licensing does not file patent applications for all invention disclosures it receives. The licensing officer assigned to the invention must consider the chances that a technology can be successfully patented or licensed before investing in the cost of obtaining patent protection (approximately $30,000 – $45,000 in the United States alone). For example, a prior publication or insufficient data may make an invention difficult to patent; a small potential market or high potential development costs may make an invention difficult to license. If a patent is warranted after taking this into account, the licensing officer may consult with the inventors to select a patent attorney or agent.

The inventor’s expertise is crucial during patent filing and prosecution. The patent attorney will be familiar with the field of the invention, but he/she is unlikely to be an expert at the level of detail that makes the invention novel, useful, and non-obvious. You, the inventor, by providing feedback, will make an important difference and are indispensable for obtaining meaningful patent protection.

The patent attorney will work with you to write and review patent applications and responses to the patent office (see Instructions for Reviewing Your Patent Applications, from Fenwick and West). The attorney will also ask the people named on the disclosure about his/her contribution to the conception of the invention to determine the correct inventors on a particular patent application.

Part of developing a license strategy involves seeking information and feedback on market risk from various sources. One of the ways Tech Licensing collects more information is by marketing the technology to companies who might be interested in dedicating money, people, and resources to develop it for broader use. Through marketing, UF Innovate works with the inventors to prepare a non-confidential abstract that is made available through Tech Licensing’s website and sent directly to targeted companies.

At this point, the licensing team appreciates the inventors’ insight regarding technical and market feasibility of the invention as well as leads for specific companies to contact. In fact, studies have shown that the best licensing leads often come from the inventors. If a company responds to the marketing and requests additional technical information, Tech Licensing usually asks the inventors to provide that. This can be done under a confidentiality agreement if necessary.

If marketing is successful and a company shows a strong interest, then the associate will begin license negotiations with the potential licensee. This starts with a license proposal (from either the licensing officer or the company) followed by negotiations that may require flexibility and creativity by both parties in order to arrive at a mutually satisfactory agreement. The terms of license agreements will vary depending on the specific technology, market, and company. For example, startup companies typically cannot afford large initial payments but are able to compensate with equity in the company and/or payments once products are on the market.

At this stage, the inventor’s role is limited. The associate will generally inform the inventors when they are in the process of negotiating a license agreement. He or she may also ask the inventors to help evaluate a company’s capacity to develop licensed products. In addition, if an inventor has a potential conflict of interest (COI), he or she will need to participate in a COI review.

Signing a License Agreement is the beginning of a long term relationship between the University of Florida Research Foundation (UFRF) and the company. The Tech Licensing office monitors the licensee’s performance for the duration of the license. Usually this is done through periodic financial or development reports that are required under most license agreements. Both the license terms and the company’s progress reports are generally considered confidential business information.

All royalty payments are collected by UF Innovate | Tech Licensing. Distributions of income will be made semiannually on or before June 1 and December 1 of each year. This allows the university or UFRF to assure that all applicable licensing and related expenses have been accounted for.

With regard to any work or invention owned by the university, net income less any foreseeable development expenses UF or UFRF deems necessary to defend or maintain the work or invention (“net adjusted income”) will be distributed as follows:

For net adjusted income up to $500,000 (Schedule A):

• 40% individual creator(s)
• 10% program(s)
• 5% creator(s)’s department
• 5% creator(s)’s college
• 35% UF or UFRF

For net adjusted income $500,000 or over (Schedule B):

• 25% individual creator(s)
• 10% program
• 10% creator(s)’s department
• 10% creator(s)’s college
• 45% UF or UFRF

Department and College royalties must be used for research or educational purposes only and represent an important additional source of unrestricted funds for these entities.

In the case of multiple inventors, Tech Licensing will divide the inventors’ share equally unless all the inventors have agreed to a different allocation. In the case of multiple technologies licensed as a portfolio, Tech Licensing makes a good faith, reasonable determination of the relative value of each technology (often with input from the licensee) and allocates royalties among the various technologies.

At times UF or UFRF accepts equity in lieu of cash as part of the license issue fees. This equity is also shared under UF policy. All net adjusted income from UFRF’s sale of equity or other ownership interests originally granted to UFRF by a licensee in lieu of cash royalties or license fees shall be distributed according to Schedule B.

As technologies, companies and markets evolve over time, it is often necessary to re-evaluate a licensing relationship to adapt to changed circumstances. Either party can request an amendment to the Agreement at any time during its life. These amendments are negotiated by the associate.