Frequently Asked Questions
- Define patent, trademark, and copyright.
- What is technology transfer?
- What is the Bayh-Dole Act?
- What are the benefits of technology transfer?
- How does the public benefit from university-industry partnerships?
- How do universities use the royalties earned from licensing?
- Will KU allow me to start a company and continue my position with the university?
- Are there any KU policies or rules that are applicable to establishing a business?
- Can I license from KU a technology that I developed/invented at KU for my company?
- How much does it cost to license a KU technology?
- What are the advantages of licensing a technology?
- How do I know if a KU technology is still available for licensing?
- What do I need to do in order to license a technology from KU?
- Do I need permission to set up a company?
- Will starting a company help me attain tenure and larger raises?
- What does it take to establish a successful business?
- Will KUCTC help me with my company by providing business advice and/or financing?
- How can I arrange financing for continuing research on the technology?
- After I set up my company I plan to apply for SBIR and STTR support. If successful, I will want to subcontract with KU to conduct some research. Can I do this?
- I may not have sufficient funds to set up my company in its own facilities or to buy equipment. Can I temporarily use my KU research laboratory for my company until the company gets on its feet? Or, in other words, does KU provide space or equipment for use by start-up companies?
- Does KU sell commercial products?
- My company would like to sponsor research on campus. How do we make this arrangement?
- Who arranges consulting agreements between companies and faculty and staff on campus?
All are forms of intellectual property recognized and protected by governments in the U.S. and other countries. Here are simple definitions:
- A patent is a set of exclusive rights granted to an inventor for a fixed period of time in exchange for a disclosure of an invention.
- A trademark is a distinctive sign or indicator of some kind used by an individual, business or other legal entity to identify uniquely the source of its products and/or services to consumers , and to distinguish its products or services from those of other entities.
- A copyright gives the creator of an original work, e.g., a substantive and discrete idea or information, exclusive rights to it for a limited time.
Universities whose research leads to discoveries and innovations are encouraged to transfer that technology to the private sector. At KU, most technology transfer occur through the licensing of patented or copyrighted intellectual property. Major steps in this process include:
- The disclosure of innovations;
- Patenting the innovation concurrent with publication of scientific research or submitting a copyright; and
- Licensing the rights to innovations to industry or university start-up company for commercial development.
Prior to 1980, fewer than 250 patents were issued to U.S. universities each year. Discoveries were seldom commercialized for the public's benefit. In contrast, 3,914 new license agreements were signed in 1999. What spurred this dramatic growth?
The success in university technology transfer—and the resulting economic and health benefits—is the direct result of the federal Bayh-Dole Act. The legislation, co-sponsored by Senators Birch Bayh of Indiana and Robert Dole of Kansas, enabled universities, nonprofit research institutions, and small businesses to own and patent inventions developed under federally-funded research programs. The act provides an incentive for universities to market their innovations and for industry to make high-risk investments.
Important points of the Bayh-Dole Act:
- University may retain title. Universities may elect to retain title to innovations developed under federally funded research programs.
- Commercial collaboration encouraged. Universities are encouraged to collaborate with commercial concerns to promote the utilization of inventions arising from federal funding.
- Patent expectations. Universities are expected to file patents on inventions they elect to own.
- Small business preference. Universities are expected to give licensing preference to small businesses.
- Government rights. The government retains a nonexclusive license to practice the patent throughout the world and the government retains "march-in" rights.
Academic technology transfer adds billions of dollars to the U.S. economy and supports job growth. It has helped spawn new businesses, create industries, and open new markets. Technology transfer leads to new products and services that improve our quality of life. From new cancer treatments to faster modems, from environmentally friendly metal processing to beautiful flowering plants, technology transfer enhances the way we live and work. University research is enhanced through industry partnerships with entrepreneurial faculty and outstanding graduate students.
University-industry partnerships help move new discoveries from the laboratory to the marketplace faster and more efficiently than ever before -- ensuring that products and services reach the public more quickly. This partnership enables the researcher who made the initial discovery to participate in the further development of a product or process, which in turn, significantly reduces the time to eventual commercialization.
Royalties earned by academic institutions are used to help advance scientific research and education through reinvestment in the academic enterprise. The royalties are given, in part, to university research departments to provide new opportunities for graduate students, buy research equipment, or fund new research. The royalties help sustain the technology transfer process by paying for a portion of the legal fees associated with patenting and licensing as well as technology management. And finally, as the Bayh-Dole Act requires, a portion of the revenues is shared with the university inventor.
Yes. However, the university will not release you from your university commitments, teaching and/or research duties, simply because you start a company. Remember, running a company requires considerable effort and time and establishing a company takes even more time and effort. Needing this extra time will not automatically reduce your University commitments.
Yes, there are several policies found in the Faculty Handbook that apply to you and your business formation. These policies relate to conflict of interest and conflict of time commitment situations. The policies are available on the KU and KUMC web sites.
Yes. However, licensing a KU technology with your company would be done, as with any other company, on a business basis, not just because you are a member of KU.
If your company does license a KU technology it can expect the license to have the following financial requirements to KU, including at minimum:
- An initial licensing fee with equity,
- A running royalty and/or equity, and
- Payment of ongoing patent costs.
Faculty, academic staff, and students should carefully weigh the risks and opportunities of starting a new business against licensing to an established firm. A preliminary market assessment should be conducted to determine the prospects for both options. This market research will be useful regardless of future choices. Market research can identify potential licensees and/or begin to build a business plan for a start-up company.
Licensing a KU technology typically involves three expenses: a license fee, patent costs and royalties. The license fee and the patent reimbursement costs are due after the agreement is executed, while royalties are due when a product is commercialized and sold. Because each technology has a different market value, the exact dollar amounts of these costs are negotiated with the Executive Director of KUCTC. The cost of an option and/or royalty rates are normally negotiated at the time of licensing.
Licensing university intellectual property provides many benefits, including:
- Improved time to market, creating increased profit opportunities
- Greatly reduced R&D costs
- Opportunity to enter new markets and expand your company quickly
To find out whether a technology you're interested in is still available, you may check the KUCTC website at www.ctc.ku.edu or call (785) 864-8087.
In order to license a technology your company should contact KUCTC in writing expressing an interest in a particular technology. KUCTC will begin a business review and, if the company/plan is appropriate, KUCTC will begin the process of transferring the technology. The licensing of a KU technology by a KU inventor, however, is not automatic. KUCTC will determine if the sound business decision is to license to your company or an established company. At no time will KUCTC deal with you as a faculty/staff member in the actual transfer of technology. In other words, you should not expect to get a special deal because of your affiliation with KU. If the technology to be licensed is your invention, KUCTC will consult with you as a KU representative on the technology. The start-up company will need to provide a business/development plan to KUCTC before licensing is completed and a business manager for the negotiation.
The business plan should clearly define:
- Ownership of existing intellectual property at the launch of the new business
- A plan for the ownership of intellectual property generated within the new business
- Each participant in the business and his/her level of effort. These participants include shareholders, owners, officers, employees with and without KU affiliation, and board members
- Participation and planned compensation of KU students. Entrepreneurs should be careful to respect the sound educational goals and career interests of KU students over the economy interests of start-up businesses
- Use of and compensation for all KU staff and facilities that are to be used by the business
- A schedule for periodically updating the business plan so that a current picture of present planned activities is always available
No. But, without the approval of a COI management plan to avoid conflict of interest, your company cannot license KU technologies or conduct any other business with the university.
This would be the decision of the departmental chair, dean, and provost.
There are a number of factors that influence success. Some of these are:
- Having a protected product or process that is new and/or superior to anything currently in the marketplace.
- Creating a full-time management team well versed in start-up and business operations. An inventor and/or an academician usually is not an effective business manager.
- Access to sufficient capital and adequate facilities.
- Obtaining long-term commitments from venture capitalists and management.
- Utilizing available, low-cost, experienced business assistance.
- Experiencing good luck.
Yes. KUCTC has staff who can help with your initial company formation issues.
Private Resources: There are several methods to capitalize a company in order to support the research including Kansas Bioscience Authority, Angel Investors, Venture Capital, personal funding, etc.
Public Resources: In addition to outside investors mentioned above, you may be eligible to apply for either an SBIR (Small Business Innovation Research program) or STTR (Small Business Technology Transfer program) grant with the US government. The criteria for SBIR includes the following:
- American-owned and independently operated
- Principal researcher employed by business
- Company size limited to 500 employees
STTR has similar requirements to the SBIR program. For more information on these programs please visit this link.
After I set up my company I plan to apply for SBIR and STTR support. If successful, I will want to subcontract with KU to conduct some research. Can I do this?
Yes. However, by supporting research at KU, especially in your laboratory, your company could cause a conflict of interest for you. This situation needs to be discussed with the KUCTC director. You should not be the KU principal investigator on any project funded by your company. In addition, an uninvolved person should be selected to review both the research and finances of any project in your laboratory, which is supported by your company.
I may not have sufficient funds to set up my company in its own facilities or to buy equipment. Can I temporarily use my KU research laboratory for my company until the company gets on its feet? Or, in other words, does KU provide space or equipment for use by start-up companies?
No. Use of university facilities by your company would place the university in a conflict situation. This conflict arises by your company having a "favorable" status over other start-up companies, which cannot use KU facilities. Facilities and equipment needs should be seriously considered when setting up a company. Your business plan also should include required space and equipment and a method to meet these needs. One option is to check into the business incubator facilities within the region, including those at KU. You may be able to support or sponsor research on the technology at the university, as can any outside company. However, there are requirements for oversight of the research that must be discussed with the Conflict of Interest committee, in order to manage any possible conflict.
KU licenses out intellectual property that can be developed into commercial products, rather than selling the products themselves. If you would like to know if a particular KU technology has or is being developed into a product by a company, visit the KUCTC website at www.ctc.ku.edu.
Industry-sponsored research at the KU Lawrence and KUMC Campuses typically involve a research agreement between KUCR and the sponsoring company, which defines the scope of the project. Often, a second agreement, called an option agreement, is negotiated between KUCR and the company at the same time. The option agreement defines the licensing rights of the company to any intellectual property that may emerge from the sponsored research.
KU Lawrence and KUMC Campus scientists represent themselves in any consulting agreements with private companies.