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New Standard Licensing Agreement Expedites University Startups, According to Kauffman Foundation Paper

A new approach to driving innovation from university research.

New Standard Licensing Agreement Expedites University Startups, According to Kauffman Foundation Paper.

FACILITATING THE COMMERCIALIZATION OF UNIVERSITY INNOVATION: THE CAROLINA EXPRESS LICENSE AGREEMENT

Improving how research comes to market will keep the nation competitive (KANSAS CITY, Mo.)
April 20, 2010 – A new licensing process for commercializing university research will support American universities’ startup companies and enable long-term economic growth, according to a new paper released today by the Ewing Marion Kauffman Foundation. As universities are debating how best to expedite commercialization of research, the University of North Carolina at Chapel Hill has developed the Carolina Express License Agreement, a standard licensing agreement to commercialize academic discoveries that promises to ease the formation of new companies and maintain American competitiveness by promoting new firm formation.

As the paper outlines, accelerating the process by which university researchers license innovations to a startup company is a way to drive economic growth and create jobs—but at many universities, this will require systemic changes to the commercialization process. The groundbreaking agreement allows potential startups to select an appropriate standardized licensing agreement rather than undertake a customized negotiation with the university that can take considerable time with unpredictable results.

“Our country’s current economic state demands new mechanisms to advance innovation. With the federal government providing much of the money for academic research, we need more tools that help our universities and entrepreneurs facilitate the kind of research that can spark industry shifts and drive job growth,” said Lesa Mitchell, vice president at the Kauffman Foundation and one of the paper’s co-authors. “The Carolina Express License Agreement is an example of how universities and entrepreneurs can streamline collaborations to facilitate the formation of new companies and jobs.”

Commerce Secretary Gary Locke recently called upon the academic community to improve the way it translates basic research into the marketplace so that the United States can maintain its lead in new and high technology industries. An improved licensing procedure is one way to meet his challenge

The Carolina Express License Agreement was developed by a committee of UNC faculty entrepreneurs, venture capitalists, attorneys and UNC’s Office of Technology Development as a way to shorten the cycle time in which federally funded inventions move from lab to market. Founders or entrepreneurs interested in starting a company can choose the Express License, which outlines provisions for company ownership, future revenue payments and other common sticking points that can slow down commercialization. Under the Bayh-Dole Act, universities own rights to intellectual property generated by their faculty.

By creating a standardized licensing agreement, UNC departs from current commercialization guidelines issued by the Association of American Universities, which states that all technologies arise under unique circumstances and therefore require a customized licensing process.

“This new standard licensing agreement streamlines negotiations between universities and researchers during the startup phase,” said co-author Joseph M. DeSimone, chancellor’s eminent professor of chemistry at UNC and one of the architects of the Express License. “The Carolina Express License Agreement maintains universities’ intellectual property rights while recognizing that technologies, innovations and IP are only a tiny fraction of what is required to create a company.”

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