- Background Technology
- Bayh-Dole Act
- Conflict of Interest
- Governing Law
- GTRC
- Income
- Indemnification
- Industry Contracting Office
- A "One Stop Shop" for industry, commerce and the professions;
- Dedicated "Cradle-to-Grave" Contracting Officers;
- Fast Track Project Initiation;
- Ability to Quickly Resolve Intellectual Property and Other Contractual Issues During the Negotiation Process; and
- Ongoing Project Review to Ensure Project Deadlines and Budgets are met.
- Inventors
- Internal Revenue Service Procedure 97-14, Guidelines for Research Agreements
- License
- What is being licensed;
- Exclusivity or non-exclusivity of the license;
- Coverage of all uses of the invention or restrictions to specific applications and/or uses;
- Coverage of all regions or restriction to specific territory (e.g. USA);
- Consideration (up-front payments, royalties, benchmark payments, payment of patent costs, equity);
- Inclusion of the right to sub-license to another party; " Ownership of improvements;
- Performance benchmarks/criteria (investment requirements, time to market, sales, etc.);
- Governing law;
- Indemnification;
- Term of the license;
- Limitation of liability and
- Termination criteria.
- Materials Transfer Agreement
- Option
- Policies
- Georgia Tech's Intellectual Property Policy.
- The Federal Government's Bayh-Dole Act Georgia Tech, in common with other research institutions, is subject to the Bayh- Dole Act which sets out the disposition of inventions made with Federal assistance. The Act provides that the institution may elect to retain title to inventions conceived or first reduced to practice in the performance of work under a Federal government agreement. Each such invention must be disclosed to the government sponsor. We must grant the U.S. government a royalty free license for governmental purposes, give preference to U.S manufacturers, give preference to small businesses, and share income with inventors. We must also periodically report our licensing activity to the government. We must adhere to these provisions regardless of how little Federal funding was utilized in the conception or development of the invention.
- Internal Revenue Service Procedure 97-14, Guidelines for Research Agreements. This IRS procedure is relevant in those cases where a research sponsor is seeking to acquire intellectual property rights to any invention which might emanate from the sponsored research, prior to the development of the invention. Generally it provides that the sponsor must pay a competitive price for rights to any invention. Potential sponsors can get further information on this procedure from the Industry Contracting Office.
- Licensing Faculty-Associated Companies. Georgia Tech must be sensitive to public perception when a faculty member is associated with a potential licensee company. While we encourage entrepreneurship and faculty involvement in start-up companies, we are aware of the faculty member's potential conflict of interest and must negotiate any such license agreement from an "arms-length" relationship. The Institute's Conflict of Interest Policy outlines procedures we follow in dealing with this matter.
- Right of First Refusal
- Start-Ups
- That the technology being licensed is appropriate for a start-up (for example, a process for the production of ethanol would not be appropriate due to the capital resources required).
- That a sound management team, with business experience, is in place.
- That they have a realistic business plan with appropriate cash flow projections.
- That the license agreement includes milestones for bringing the technology to market.
- That any potential conflicts of interest can be managed.
- Students
- Technology Transfer
- Warranty
FAQs for Industry
Background Technology
Bayh-Dole Act
Conflict of Interest
Governing Law
GTRC
Income
Indemnify
Industry Contracting Office
Inventors
Internal Revenue Service Procedure 97-14
License
Materials Transfer Agreement
Option
Policies
Right of First Refusal
Start-Ups
Students
Technology Transfer
Warranty
What is Background Technology?
Background Technology (or Underlying Technology) is pre-existing technology which is essential to practice your invention. It can also include technology which it is desirable to have in order to best practice your invention.
What is the Bayh-Dole Act?
Georgia Tech, in common with other research institutions, is subject to the Bayh-Dole Act which sets out the disposition of inventions made with Federal assistance. The Act provides that the institution may elect to retain title to inventions conceived or first reduced to practice in the performance of work under a Federal funding agreement. OTL must disclose each invention to the government sponsor in a timely manner, and comply with other regulatory actions. In addition, we must grant the U.S. government a royalty free license for governmental purposes, give preference to U.S manufacturers, give preference to small businesses, and share income with inventors. We must also periodically report our patenting and commercialization activity to the government. We must adhere to these provisions of the Act regardless of how little Federal funding was utilized in the conception or development of the invention.
What is conflict of interest?
"Conflict" can be defined as "any outside activity or financial interest which interferes with the full and faithful performance of the employee's responsibilities or obligations to the institution." The term "conflict of interest" refers to situations in which financial or other personal considerations may directly and significantly affect, or have the appearance of directly and significantly affecting, a faculty member's or staff member's judgment in exercising any Institute duty or responsibility or in the conducting or reporting of research. The bias that such conflicts may conceivably impart can adversely affect many Institute activities, including decisions about the supervision or evaluation of students, collection, analysis and interpretation of data, sharing of results, choice of protocol, use of statistical methods, and restrictions on publication.
Will GTRC accept our State of incorporation as governing any license agreement?
Not normally, unless your state of incorporation is Georgia. As a State Agency, Georgia Tech does not have the legal power or authority to contractually grant to a third party any right pertaining to potential litigation (such as venue). Therefore we ask that any agreement be governed by the laws of the State of Georgia.
What is GTRC?
GTRC (Georgia Tech Research Corporation), a 501 (c)3, not-for-profit corporation, was chartered in the State of Georgia in April, 1937, to serve as the contracting entity for Georgia Tech. It provides research administration, contracting and intellectual property management services to the Institute's faculty, staff and students. In providing these services it seeks to be efficient, effective and flexible. Title to all intellectual property developed during the course of Georgia Tech's research activities resides with GTRC. OTL is a division of GTRC, and supports Georgia Tech's technology transfer activities with an innovative and flexible licensing program.Why is GTRC /Georgia Tech involved in technology licensing?
As a public institution, Georgia Tech has an obligation/responsibility to make its research results available for the benefit of the community. Entering into commercial arrangements for the further development of technology is often the only way by which the Institute is able to ensure that the technology is made available. The Institute's technology is usually at an early stage, and will require a substantial investment in its further development before a product is ready for market. No company would normally commit to the support of that further development without an agreement in place to ensure that it will receive commercial benefit from its investment should the further development be successful. Also, the Institute has specific obligations under the Bayh-Dole Act to protect and seek to commercialize any invention arising from government sponsored research, as well as other obligations under that Act.What is GTARC?
GTARC is a subsidiary of GTRC and serves as the contracting entity for a single unit of Georgia Tech, the Georgia Tech Research Institute (GTRI). GTARC contracts under the provisions of OMB Circular A-122 and FAR 31.2.
What do we mean by "Income"?
When we use the term "income", we mean income derived by GTRC from the commercialization of intellectual property. This income is distributed in accordance with the Institute's Intellectual Property Policy. It includes up-front option and license fees, royalties, benchmark payments, and the realization of equity held by GTRC as part consideration for the grant of a license.How is the income received by GTRC from technology transfer distributed?
Net income, that is gross income less patenting and any other direct costs, is shared between the Institute, the inventor(s) and GTRC. The share of the income retained by GTRC is first used to meet the costs of OTL's operations, including patent costs on those inventions which are not successfully commercialized and any balance is used to further the Institute's research activities.
Will GTRC, in negotiating a license, agree to indemnification of the licensee?
No. The State Attorney General has issued an opinion holding that State Agencies are prohibited from agreeing to indemnity and hold harmless clauses. This opinion is based on two provisions in the Georgia Constitution. GTRC will not normally agree to an indemnification provision either because GTRC has financial obligations to Georgia Tech, or as a non-profit corporation cannot keep reserves sufficient to cover any financial liability that might result from granting indemnity.
What is the Industry Contracting Office (ICO)?
The Industry Contracting Office (ICO) is a division of Georgia Tech's Office of Sponsored Programs. ICO's mission is "To promote efficient and effective administration of industry-sponsored research projects". Key features of ICO include:ICO and OTL routinely interact on IP issues in research contracts.
If we seek to license a technology from GTRC, are the inventors involved?
The active collaboration of the inventor(s) is essential in the marketing and licensing process. They can help determine the apparent value of the invention, and they respond to companies' technical questions on the invention and demonstrate its uses and advantages. However, although the inventor(s) are consulted and advised during the negotiating process, they are not usually directly involved in the negotiations.
What is IRS Procedure 97-14? Internal Revenue Service Procedure 97-14 is relevant in those cases where a research sponsor is seeking to acquire intellectual property rights to any invention which may emanate from the sponsored research, prior to the development of the invention. Generally it provides that the sponsor must pay a competitive price for rights to any invention. Further information on this procedure can be obtained from the Industry Contracting Office. (Also see www.cogr.org for additional information).
Is there a standard fee and terms for a license?
No. License fees and royalty rates, and other terms and conditions, are determined on a case by case basis because every technology, and the circumstances of the proposed commercialization arrangement, are unique.
What issues are covered in a license agreement?
The issues covered in a license agreement include:
What is GTRC's major aim when proposing a license agreement?
The goal in any negotiations is to enter into a license agreement which is fair and reasonable to both parties, and will ensure a long-term mutually rewarding relationship between the Institute and the Licensee. Within the legal constraints imposed upon us, flexibility is the key word. Most licenses have circumstances that require special consideration. A few examples include the investment to be made by the Licensee to bring the invention to market, competitive technologies, whether the technology is a stand-alone invention or needs another technology to enable it to be utilized, and the patent position. If the Licensee is a start-up company, they normally cannot afford significant up-front payments, but can offer equity or payments to be made when certain benchmarks are attained.
What is a Materials Transfer Agreement? A "Materials Transfer Agreement" (MTA) is an agreement that provides that any materials being made available by one party to another, are being made available for scientific work only and not for commercial use. No right of ownership or commercial use is transferred to the recipient of the materials.
What is an option?
An option is an agreement which grants a company, for consideration, an exclusive right for a limited period of time to evaluate the technology and/or negotiate a license on agreed upon terms and conditions.
What are GTRC's/Georgia Tech's Policies that I should be aware of?
Like any other institution or organization, we have to work within the parameters of certain laws, regulations and procedures. These include:
What is a Right of First Refusal?
A right of first refusal is an agreement wherein a company is given the first right, for a limited period, to seek to negotiate a license for an invention. It does not set pre-determined terms and conditions and does not preclude us from seeking interest from other parties. However, if another party makes an appropriate proposal for license rights, then we must first offer the right of first refusal holder a license on the terms offered to us by the other party.
Does Georgia Tech encourage faculty or student start-ups?
Georgia Tech actively encourages entrepreneurship and the involvement of its faculty inventors in start-up companies if they so choose. However we must be sensitive to public perception when a faculty member is associated with a start-up company. There is always the likelihood of conflict of interest, but these conflicts can usually be managed. The Institute's Conflict of Interest Policy outlines procedures we follow in dealing with this matter.What factors does GTRC consider when considering licensing a start-up?
When licensing to a start-up OTL must ensure:
Do you write or help to write business plans?
No, but we work closely with VentureLab who will help you with this.What is VentureLab?
VentureLab is part of Georgia Tech's Office of Economic Development and Technology Ventures. It helps provide a clear pathway from laboratory to market, with guidance along the way from entrepreneurs who have already made the trip. VentureLab helps faculty who want to be involved in a start-up to evaluate the potential of their technology, provides connections to attract outside funding and offers pre-seed awards to help move innovations to the commercial stage (see www.venturelab.gatech.edu).Does GTRC take any management role in a start-up?
No, or any Board position.
Are students subject to Georgia Tech's Intellectual Property Policy?
Yes. The Student Handbook states that any student enrolled at Georgia Tech is subject to the Institute's Intellectual Property Policy. If any intellectual property is conceived or developed by a student during the performance of their course work, title to the intellectual property resides with GTRC. Student inventors enjoy the same rights and benefits as do faculty and staff inventors.
What is Technology Transfer?
Technology may be transmitted through the intangible process in which any body of knowledge is diffused, or it may be the subject of a specific communication, enshrined in a particular transaction. Technology transfer, in this latter sense, conventionally takes the form of an integrated sequence of commercial transactions. This sequence includes the grant or assignment of industrial property rights; the communication of technical know-how in a documentary form; and the communication of technical; or other know-how in a documentary form; and the communication of technical or other know-how in the supply of services. It is the grant of industrial property rights to which we are referring when we use the term, in a generic sense, of "technology licensing." In practice, we are referring to any means adopted for the commercialization of technology, whether it is licensing, joint venture, distribution or any other appropriate arrangement.
Underlying Technology
See Background Technology
Will GTRC provide a warranty to a licensee?
No. The State Attorney General has advised that giving a warranty is, in essence, an indemnity in most cases. Therefore, Georgia Tech cannot agree to provide any type of warranty or indemnify a third party for any breach of representation or warranty. A related issue involving warranty relates to the fact that as an educational institution Georgia Tech performs research of an experimental nature and is not in the business of developing products, and cannot guarantee that a product will meet specifications or perform in a certain manner. However we will make representations "to the best of our knowledge".
