The University of Missouri System’s express license initiative is a fast-track process that will allow faculty entrepreneurs to focus their time, efforts and resources on the development and commercialization of University technology. This express license is designed streamline the contract negotiation process and replace it with a license that has a predefined set of terms and conditions. The terms are based on the idea of shared success and are meant to encourage entrepreneurial efforts at the University of Missouri.
The guidelines below are designed to provide insight into the applicability and use of the express license. The key terms and conditions of the express license are detailed below:
- License Grant - An exclusive license with the right to sublicense
- No re-payment by the licensee for past patent costs (up to $10K), two options for future patent costs;
- Option 1 – licensee pays all future patent costs (2% success fee)
- Option 2 – up to an additional $15K of future patent costs paid by the University (4% success fee)
- No upfront, annual or milestone fees
- A fixed 2% patent royalty rate on sales (by licensee and any sublicensees)
- No minimum annual royalty payments
- A 2% (or 4%) “success fee” at an exit event of the company
- Financial success milestones track company success
- Due diligence performance milestones based on a detailed business plan
- A 33% sublicensing royalty for all non-sales royalty considerations licensee receives from any sublicensee
- No equity for University of Missouri
University of Missouri faculty and employees (graduate students, postdocs and staff) who are inventors on the technology to be licensed and have interest in obtaining a license for their startup company based on the disclosed invention should contact their university’s technology transfer office (TTO). The terms and conditions are supportive of the University of Missouri’s status as a public university supported in part by the citizens of Missouri and also reasonable and supportive of the startup company.
When is the Express License Applicable?
The primary objective is to streamline the contract execution process for both parties in an effort to reduce the ensuing legal costs and increase deal flow. While the University ultimately has discretion to enter into any license (including the express license), in order to qualify for the express license, the following terms and conditions must be met:
- The TTO approves of the applicability of use of the express license to the particular startup company.
- The founder(s) of the startup company is/are a University of Missouri employee and inventor of the technology to be licensed.
- The technology is solely owned by the University of Missouri (no joint ownership of the technology).
- A patent application (typically, only a provisional patent application) has been filed on the technology.
- The patent pending intellectual property (IP) is the basis for forming the new startup company.
- A detailed business plan has been provided to and approved by the technology transfer office handling the case (see below for more details).
- The founder and other members of the team have disclosed to the TTO any potential licensees or commercial partners.
Conflict of Interest
- As a University of Missouri employee and company founder you may need to obtain a separate conflict-of-interest (COI) approval from the campus COI committee. This process is independent of technology transfer and you are responsible for initiating and completing this process.
- The express license will be executed only upon completion of the COI approvals.
Details of the Business Plan
The use of express license is contingent upon the submission and approval of a business plan by the campus technology transfer office. The business plan is a major guidepost of the startup enterprise and therefore utmost care and diligence must be taken in drafting this document. Please be prepared to submit the following documents for the review process:
- Detailed business plan as per specifications provided below;
- The plan must be written by the team (CEO, CTO, key leaders) who will be leading the company with help from consultants/advisors.
- The plan will include information about the company leadership team and their credentials.
- The plan serves as a blueprint outlining the company’s vision for the university technology and the commercialization pathway it intends to adopt.
- The business plan must include meaningful diligence milestones in the development of the technology and company maturation.
- The plan will include a reasonable financial plan showing funding strategies and potential sources of funds to support commercialization.
- From an institutional standpoint, the TTO director or his/her designee will coordinate the process once the business plan is approved prior to the execution of the license agreement.
Upon submission of the business plan, the technology transfer office will contact you if there are additional questions. The execution of the express license is dependent, among other things, upon resolving any questions that may arise during internal review of the business plan.
Each university within the University of Missouri System is individually responsible for managing and licensing their technologies. For more information about the new express license, please contact a campus-specific director.