Glossary of Terms
In the technology commercialization industry, certain terms and conditions are commonly incorporated into agreements. University Technologies International makes use of these industry-standard terms in its dealings with its clients. The following is a general explanation of some of the terms with comments on how UTI uses them.
- Confidentiality - UTI expects all licensees to preserve the confidentiality
of all UTI and UTI/U of C proprietary information and trade secrets
pertaining to university inventions.
- Consideration for a License - The grant of a license to a company typically includes the following:
• A license initiation fee.
• Equity.
• Ongoing royalties based on gross revenues received by the licensee through the exploitation of the invention.
• Minimum royalties or other resource commitments by licensees in the early
stage of commercialization of the invention.
• Specific terms such as the amount of the initiation fee and royalty rates
shall be determined by factors such as the nature of the invention, the
potential market for the invention, the cost of manufacturing for the
invention, etc. - Indemnification - UTI expects to receive an indemnification from licensees
which will hold UTI and the University of Calgary harmless from any claims,
actions or other damages arising from the licensees practices for the
licensed technology.
- License Agreements, Rights Granted to Licensee - Rights granted to licensees typically include a non-exclusive or exclusive right to practice or manufacture products based on inventions claimed in pending patent applications or issued patents in certain fields. Where patent protection is not available for an invention, licensees are granted non-exclusive or exclusive rights to practice and/or manufacture products based on trade secrets and proprietary information. For exclusive licensees, sublicensing
rights are negotiated. Sublicensing is generally not permitted with
non-exclusive licensing.
- Option Agreements - In many cases, inventions require further research and
development before they can be commercialized. Entering into a combined
research and option agreement is a useful means of protecting a potential
licensee¹s interest in the invention while simultaneously preparing it for
the market. This option period gives the optionee time to fully evaluate the
invention before making a substantial commitment to a license.
- Patent Expenses - In most cases, UTI begins the patent prosecution process in Canada and the U.S. jurisdictions. Once a high degree of certainty that a commercialization partner is found or an international license is executed, international patents (which can get very expensive) are sought. In all cases, UTI is reimbursed by the licensee for all out-of-pocket patent expenses and in most cases remains responsible for patent and IP management.
- Protection of Intellectual Property Rights - Where UTI grants an exclusive license, UTI expects the licensee to identify and prosecute infringers. Infringers are interlocutors who tread in a field-of-use defined by a patent – as these parties do not have “freedom to operate” they are forbidden from selling products or services defined in the patent and must get permission from the patent holder. Where UTI grants a nonexclusive license, UTI typically agrees to cooperate with the licensee in identifying and prosecuting infringers.
- Rights Granted to Optionees - Rights granted to optionees typically include an exclusive right to evaluate the information available on an invention during a specified period of time. UTI will not license the invention to a third party during the option period. In consideration for such an option, an option fee is paid to UTI.
- Warranties - UTI and the University of Calgary typically disclaim any and
all promises, representations and warranties with respect to any licensed
technology.
