Patent Licensing

PSU will, in consultation with inventors, make PSU-owned inventions available to industry and the public in an effective and non-discriminatory manner, obtain reasonable royalties for use in furthering institutional education and research objectives, and reward inventors through participation in net royalty income received. A description of the PSU Royalty Distribution Policy can be found at IMD 6.250.

The above guideline is from IMD 6.245.

Although IIP focuses on using patents to promote use and impact, the directive above must also be taken into consideration as we license patents and patent applications to both established companies and faculty start-ups. In the majority of cases, we do not give free licenses. We engage in an arms-length transaction to establish monetary compensation terms that are fair and appropriate. IIP strives to build the compensation structure of our licensing deals in a way that best fits the needs of the innovation and the needs of the company.

IMD 6.245 also states that we prefer non-exclusive licenses over exclusive licenses, except where an exclusive license best serves the development of the innovation. The term of such exclusive licenses should be limited to a time necessary to achieve and benefit from commercial development. The IMD calls for five years from the date of first commercialization of the invention or issuance of the patent, however, IIP recognizes that in order to best pursue development and deployment of our innovations we must adhere to industry standards for the terms of exclusive licenses, and for some innovations they are often longer than five years.

IMD 6.245 also enumerates items which we need to include in any patent license. There are provisions:

  • prohibiting the use of the name of the researcher, institution, and Board, either directly or implied, in any advertising relating to the commercialization of the product or process or in supporting evidence provided in prospectus literature, and the use of any statements which imply approval of the licensee's or sponsoring agency's marketing techniques, business objectives, or relationships with wholesalers, retailers, or consumer. Exceptions to this policy require Board approval;

  • indemnifying the institution against any and all claims, demands, damages, costs, and other related items arising from the manufacture, use, or sale of the licensed invention or process, and, whenever possible, from any liability for damages resulting from a final judicial determination that such commercial utilization of the invention constitute an infringement of any third party patent;

  • allowing the institution to produce and use the invention or process for its own educational or research purposes;

  • allowing the institution and inventor to publish the findings of research and to continue with research related to the process or invention including publication of future findings;

  • for receiving or examining accounting records maintained by the licensee and any sub-licensees; and

  • for removing licensing rights and terminating the agreement should the licensee fail to develop and market the product within a reasonable time.