Rethinking IP: Adding Flexibility to Sponsored Research Agreements
Jan. 14, 2025—For many universities and companies, balancing intellectual property (IP) protections with new collaborations can be a delicate process—one that may cause delays in getting a contract finalized. Over 10 years ago, several institutions reviewed decades of data related to the financial outcomes of sponsored research-generated IP to try to improve their research partnership processes. They found that offering potential partners more flexible options was unlikely to result in significant revenue losses. Their new approaches enhanced existing processes and presented new avenues for partnerships while reducing patenting expenses and expanding opportunities for faculty and students. The changes made by the University of Minnesota, Penn State University, and others offer valuable insights into how creative IP policies can help institutions become more attractive to industry partners.
New approaches
The University of Minnesota (UMN) has continued to evolve its menu of IP options that reduce the risk and cost of licensing IP and sponsoring research. The Minnesota Innovation Partnerships program, or MN-IP, aims to streamline partnerships between UMN and industry partners. The MN-IP Create program establishes upfront terms and lets the company control patent filings associated with a technology developed during the research project or allows companies to wait until after the project is completed to license the technology. It includes exclusive or nonexclusive rights to the technology, a one-time upfront fee, and royalty or royalty-free license options. MN-IP also uses a Try & Buy program, where companies test drive existing university technologies—using the IP for a fee during a trial period to decide if it meets company needs.
Similarly, Penn State University developed a selection of IP options for companies looking to secure collaborative research project IP. This is in addition to Penn State’s default IP terms, which grant non-exclusive rights to use IP for internal purposes with an option to negotiate for exclusive licenses. For other options, Penn State offers an exclusive royalty-free commercial license with a one-time upfront fee as well as an exclusive license with pre-set royalty terms.
Adding options
These flexible approaches initiated more than a decade ago are more common today but are seldom used. A 2023 UIDP survey found that 60% of respondents used an upfront IP program and made that information public, though some restrict upfront IP options to master research agreements or for certain sponsors. Most (84%) offer these programs to bring transparency to the contracting process and reduce negotiation time and effort for both parties or to position the university as business-friendly (79%). Even with these options, most respondents indicated a utilization rate of 5-10% or even less, with a few U.S. exceptions at around 20-30% and one international school with a 50% utilization rate. To learn more about upfront IP and other IP options, UIDP members can download UIPD’s Upfront IP Quick Guide, as well as a list of universities that offer upfront IP terms.
Why it matters
The upfront IP models increase the number of approaches that companies can consider, providing new options that allow industry to pursue partnerships with less cost and risk. Even if only applied situationally or to enhance existing IP policies, flexible IP options can open the door for new partnerships and projects that would have otherwise remained closed. The U.S. National Science Foundation recently published a request for comments to inform new IP options in the agency’s partnerships–in part to increase flexibility. Share your perspective before Jan. 24, 2025.
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