Licensing to Existing Companies

Agsoil Analytics company founders posing in corn field with ipad.

Put simply, a license is a permission given by one party (the ‘licensor’) to another party (the ‘licensee’). In the case of intellectual property (IP), that permission often takes the form of allowing the licensee to use the IP owned by the licensor in an agreed upon manner, but does not involve the licensor selling the IP or otherwise transferring ownership permanently to the licensee.

In all cases, Purdue Research Foundation (PRF) aims to ensure that Purdue technologies are licensed to companies able to develop those technologies into products and services. All potential licensees must demonstrate that they have sufficient resources, management talent and plans to see the technology launched as a product. Because of their differing structures, assets and inherent risks, different approaches must be taken when licensing to established companies versus new business startups in order to achieve that same goal; this section deals with the former, the latter is discussed later in this chapter.

With either type of licensee, a PRF technology license follows a consistent format. The license begins with a Preamble, which sets forth facts in the agreement, such as the identity of the parties involved and details of the technology being licensed. A definitions section follows, outlining the precise meaning of the terms used throughout. The remainder of the license includes business and legal terms that constitute the details and specifics of the agreement between the parties.

The majority of terms in PRF licenses are negotiable. However, certain terms are so important as to be non-negotiable, such as the right of Purdue to use licensed technology for education or non-profit purposes and indemnification of PRF and Purdue by the licensee. Yielding on these terms would negatively impact the principal activities of Purdue and PRF, namely education and scholarly research. Negotiable terms in PRF licenses generally include such things as the ability to sublicense the technology, the field of use and territory in which the license is granted, and financial terms such as considerations due in exchange for the license. PRF’s goal is to tailor the overall balance of these negotiable terms to fit the specifics of each individual licensee and opportunity.

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